Global Public Debt to Surpass USD 100 Trillion in 2024, IMF Warns of Accelerating Growth

Washington, D.C. – Global public debt is expected to exceed USD 100 trillion this year for the first time, driven by increased spending and slower economic growth, according to the International Monetary Fund (IMF). The IMF’s latest Fiscal Monitor report, released ahead of the IMF and World Bank’s annual meetings in Washington, D.C., paints a concerning picture of rising debt levels worldwide.

The report estimates that global public debt will reach 93 percent of global gross domestic product (GDP) by the end of 2024, a significant jump from pre-pandemic levels. In 2019, global public debt stood 10 percentage points lower, underscoring the rapid acceleration of borrowing in recent years.

Rising Debt Fueled by Spending and Slow Growth

The IMF attributes the sharp rise in public debt to a combination of factors, including higher spending, weak economic growth, and the effects of tighter financing conditions. The report emphasizes that political pressures in key economies, particularly in the United States, may further push debt levels higher. The desire for increased public spending, particularly in the world’s largest economy, could lead to further borrowing to finance government programs and infrastructure investments.

The report highlights that systemic risks in major economies like the U.S. and China are contributing to the global debt burden. Weak growth prospects, compounded by uncertainties in fiscal and monetary policy, are raising concerns about the sustainability of public debt in these and other large economies.

Debt Could Reach 115% of Global GDP Under Adverse Conditions

In a “severely adverse scenario” outlined by the IMF, global public debt could soar to 115 percent of global GDP by 2027, 20 percentage points higher than the current forecast. This scenario envisions a combination of slow growth, higher borrowing costs, and persistent financial market uncertainty, which would lead to a sharp increase in debt levels over the next three years.

The report warns that current high levels of public debt are exacerbating the impact of tighter financial conditions, as rising interest rates increase the cost of borrowing. Additionally, declining growth in major economies like the U.S. and China is likely to amplify the strain on government finances, further increasing the need for borrowing.

Global Concerns Over Debt Sustainability

The IMF’s warning comes as governments worldwide grapple with the aftermath of pandemic-related spending, as well as the impact of inflation and rising interest rates. The report urges policymakers to take steps to address the risks associated with growing debt, including ensuring fiscal sustainability and managing the costs of borrowing more effectively.

As the world’s public debt surpasses the USD 100 trillion mark, concerns about the long-term stability of the global financial system are becoming more pressing. Economists are calling for coordinated international efforts to address these challenges, while some governments may need to rethink their spending priorities to avoid further debt accumulation.

The IMF’s Fiscal Monitor will serve as a key focus during the upcoming meetings, as global leaders discuss strategies to mitigate the risks posed by rising public debt and to promote sustainable economic growth.