IIF reports emerging market debt rises $6.5T to over $110T in H1 2026

Summary

The Institute of International Finance (IIF) reported that emerging market debt surged by $6.5 trillion to exceed $110 trillion in the first half of 2026, driven primarily by China. This increase comes amidst ongoing international tensions, particularly conflicts in the Middle East, which have influenced risk sentiment in emerging market debt. Despite these challenges, many emerging markets have demonstrated resilience through supportive policy settings and improved inflation management, contrasting with developed economies facing greater uncertainties.

Analysis

IIF: The Institute of International Finance serves as a leading global association for the financial services industry, focusing on research, policy advocacy, and monitoring of debt and capital flows. It released its latest Global Debt Monitor on September 23, 2026, detailing developments in emerging market debt during the first half of the year. The organization collaborates with ratings agencies and hosts events to analyze fiscal trends and risks across markets. China: China stands as the world's second-largest economy and a dominant player among emerging markets, with extensive government and corporate borrowing activities shaping regional and global debt patterns. The IIF report highlights China's significant contribution to the overall increase in emerging market debt levels in the first half of 2026. Its fiscal policies and infrastructure investments continue to influence broader capital market dynamics. Debt Monitoring: The IIF regularly issues Global Debt Monitor reports that track sovereign and sectoral borrowing trends in both mature and emerging economies. Policy Resilience: Many emerging markets have maintained supportive policy settings and improved inflation management compared to developed economies amid recent global uncertainties. Geopolitical Context: Ongoing international tensions, including conflicts in the Middle East, have affected risk sentiment and performance in emerging market debt during 2026.

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