Debt in smaller emerging market countries, which are now providing the majority of the world's growth, rose to a record high of $69 trillion in the first quarter, IIF reported.

Why it matters: EM debt has been growing at a breakneck pace so far this year, as global investors search for yield with developed market interest rates at or near all-time lows.

The lower rates in the U.S., Europe and Japan are pushing increasing demand for higher-yielding EM bonds, with yields on the U.S. benchmark 10-year Treasury note at the lowest since 2016, and many European and Japanese government bonds holding negative yields.

Increasingly countries with little to no track record and shaky fundamentals have been able to issue larger bond issues for extremely low rates.

What to watch: Net borrowing in so-called frontier markets — countries too small or underdeveloped to be labeled emerging, such as Zambia, Bangladesh and Tunisia — reached over $250 billion in 2018, bringing the total stock of FM debt to more than $3.2 trillion, according to IIF data. That was equal to 117% of frontier countries' GDP.

The big picture: This could become a problem for both the investors buying the bonds and the countries issuing them. The IMF and IIF both highlighted growing concerns about debt sustainability earlier this year, prompting calls for policy remedies including more transparency in lending to vulnerable countries.

Go deeper: The global debt binge begins anew