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Expand chart
Reproduced from Institute of International Finance; Chart: Axios Visuals

The world's debt rose by $3 trillion in the first quarter of 2019 — an almost unprecedented borrowing binge that brought total global debt to $246.5 trillion.

Why it matters: High levels of debt put countries in a vulnerable position in the event of a downturn and could endanger the world's economic recovery, said economists from the Institute of International Finance, which released the study today.

What's happening: Countries had been reducing their debt burdens since the beginning of 2018, when global debt reached its highest level on record, $248 trillion. But Q1's major uptick brought it to nearly 320% of the world's GDP, also near the all-time high, according to IIF's data.

  • Lower global interest rates and increased government spending are fueling the trend.
  • Total U.S. debt rose to a new all-time high of more than $69 trillion — led by federal government debt, which is now over 101% of GDP.
  • The U.S. corporate sector is also issuing more debt, boosted by an increase in bank lending, IIF noted.

What they're saying: "The 2018 slowdown in debt accumulation is looking more blip than trend," Emre Tiftik, IIF's deputy director of global policy initiatives, said in the report, released today.

  • "Helped by the substantial easing in financial conditions, borrowers took on debt in Q1 2019 at the fastest pace in over a year."
  • Further, Tiftik added, there's growing concern that central banks easing policy around the globe will prompt countries to issue more debt. "For some vulnerable low-income countries, debt sustainability is already at risk," he said.

Background: The Fed is expected to lower U.S. overnight interest rates at its policy meeting this month, following rate cuts from the central banks of Australia, India and New Zealand as well as multiple emerging market countries this year.

  • Market analysts are expecting the world's largest monetary authorities to embark on a coordinated effort to loosen policy, as the ECB and BOJ also are expected to cut rates.

Watch this space: Substantial debt growth is taking place in Finland, Canada and Japan, which have seen the largest increase in debt-to-GDP ratios of all countries IIF tracks over the past year. Developed markets, like the U.S., Western Europe and Japan, saw total debt rise by $1.6 trillion in Q1, with debt outstanding now totaling $177 trillion.

Go deeper: One nation, drowning in debt

Go deeper

Biden will reverse Trump's attempt to lift COVID related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.