(Bloomberg) -- The pile of debt around the world is finally shrinking, according to the Institute of International Finance.

Global debt declined to $296 trillion in the third quarter after reaching an all-time high in the three months prior, IIF data show. And another trillion could come off the books by year’s end as economies recover from pandemic shocks and reduce their dependence on borrowing, IIF director of sustainability research Emre Tiftik and others wrote in a note. 

Mature markets account for the decline in global debt, most significantly in the euro area and Japan, according to the IIF. A solid economic recovery helped cut the world’s debt-to-GDP ratio to 350% in the third quarter, down more than 10 percentage points from a record at the beginning of the year.

Emerging markets, meanwhile, continued to see debt levels rise despite low borrowing costs and smaller budget deficits. 

Here’s what else the IIF said about global debt levels as of the third quarter: 

• Mature market debt declined by $1.4 trillion to below $204 trillion
• Total debt in emerging markets rose to a record $92.5 trillion in the third quarter
  • EM increase was concentrated in China, which accounts for 80% of the EM debt buildup since the pandemic began
• Excluding China, emerging-market debt climbed to $36.4 trillion, a $3.6 trillion gain since end-2019
• More than 95% of the bump in EM debt since the close of 2019 has been in local currencies

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