A report released by the Institute of International Finance on Tuesday indicates that global debt has surged by approximately $7.5 trillion in the first quarter of the year, reaching an unprecedented level of over $324 trillion.

The report states that China, France, and Germany were the largest contributors to this increase in global debt, while Canada, the United Arab Emirates, and Turkey saw declines in debt levels.

The institute noted in its Global Debt Monitor that the sharp decline in the value of the U.S. dollar against major trading partner currencies contributed to the increased value of debt in dollar terms.

However, the rise in the first quarter was more than four times the average quarterly increase of $1.7 trillion recorded since the end of 2022.

While the overall global debt-to-GDP ratio has shown a slow downward trend, currently standing just above 325 percent, the ratio for emerging markets has reached an unprecedented level of 245 percent.

The total debt in emerging markets rose by over $3.5 trillion in the first quarter, surpassing $106 trillion.

China accounted for more than $2 trillion of this increase, with the Chinese government's debt-to-GDP ratio reaching 93 percent, expected to hit 100 percent before the end of the year.

The nominal values of debt in emerging markets excluding China also reached an all-time high, with Brazil, India, and Poland experiencing the largest increases in their dollar-denominated debt.

However, the institute's data indicated that the debt-to-GDP ratio in emerging markets outside of China declined to below 180 percent, which is approximately 15 percentage points lower than its all-time high.

Emerging markets are also facing a record $7 trillion in bond and loan repayments due between now and 2025, while advanced economies have a total estimated at around $19 trillion.

A decline in dollar value has alleviated some stress for developing economies, mitigating the impact from fluctuations stemming from the trade war initiated by former U.S. President Donald Trump.

The institute commented that prolonged policy uncertainty may necessitate more adaptive fiscal policies, especially for countries with strong trade ties to the United States.

There remain concerns regarding U.S. debt levels and the potential impacts on U.S. Treasury yields stemming from substantial financing needs for the world's largest economy, driven in part by tax reduction efforts.

According to the report, a significant influx of U.S. Treasury securities could exert upward pressure on yields, substantially increasing government expenditures due to interest payments.

In light of such a scenario, inflation risks could also rise.

The Trump administration viewed tariffs as a mechanism to bridge the budget gap created by anticipated tax cuts; however, uncertainties surrounding trade policies and their implementation have slowed corporate spending and impacted U.S. growth.

The report indicates that these tariffs, set at 10 percent globally, could ultimately lead to reduced government revenues if retaliatory measures are taken by other nations.