The International Monetary Fund (IMF) has warned that global public debt could reach nearly 100% of global GDP by the end of the decade, driven by new US tariffs, slowing economic growth, and global policy uncertainty. According to the report, the debt is expected to rise to 95.1% in 2025 and jump to 99.6% by 2030, almost matching the peak during the COVID-19 pandemic.
This financial pressure stems from several key factors such as increased defense spending, social support, and rising debt service costs. The fiscal deficit is expected to remain high at an average of 5.1% of GDP next year, while the impact of tariffs and retaliation is expected to further worsen the fiscal outlook and global economic growth.
In a worst-case scenario, debt could soar past 117% of global GDP by 2027, the highest percentage since World War II. The IMF warned that most of the debt growth was concentrated in large economies, although only a third of IMF members experienced faster debt growth than before the pandemic.
The IMF also called on countries to prioritize gradual and credible debt reduction, by implementing fiscal consolidation plans and ensuring that automatic stabilizers such as unemployment benefits work effectively. Any new spending would also need to be balanced by other cuts or additional revenue generation
