Trend The balance sheet detaches further from the real economy, driven by the US and China

Summary

MGI identifies a widening disconnect between the global balance sheet and the real economy as the defining development of 2025. Most of that widening traced back to the two largest economies rather than to the world as a whole. In the United States, equity climbed to 2.4 times the net assets of corporations, supported by a profit share of GDP that has doubled since 2000. In China, corporate borrowing grew to about 80 percent of real assets, compared with roughly 50 percent worldwide, while government debt rose faster there than anywhere else and stayed close to record levels in the US. The report places this in a longer pattern in which household wealth outgrew GDP from the mid-1990s until the pandemic, helped by falling interest rates, surging US profits, and a Chinese property boom, while productivity and net new investment lagged.