The International Monetary Fund (IMF) has sounded the alarm over the world’s mounting public debt, projecting that the total global debt burden will surpass 100% of global Gross Domestic Product (GDP) by the end of this decade — a level not seen since the aftermath of World War II in 1948.
The International Monetary Fund (IMF) has sounded the alarm over the world’s mounting public debt, projecting that the total global debt burden will surpass 100% of global Gross Domestic Product (GDP) by the end of this decade — a level not seen since the aftermath of World War II in 1948.
In its latest Fiscal Monitor Report, released on Wednesday in Washington, the IMF attributed the expected surge in public debt to a combination of rising borrowing costs, escalating defense spending, and the fiscal pressures created by aging populations and persistent budget deficits.
According to the Fund, many countries are entering a period of tighter financial conditions with already elevated debt levels, leaving little room for fiscal complacency. It warned that, unless governments adopt corrective measures, the world’s debt-to-GDP ratio could climb to an alarming 123% by 2029, threatening long-term fiscal sustainability and global financial stability.
“Starting from already elevated levels of deficit and debt, the persistence of spending above tax revenues will push debt to ever higher heights, threatening sustainability and financial stability,” the IMF stated in its report.
The release of the report coincides with the ongoing annual meetings of the IMF and the World Bank in Washington, where global finance ministers and central bank governors are meeting to deliberate on strategies to navigate sluggish economic growth, stubborn inflation, and increasing fiscal constraints.
The IMF emphasized that the period of cheap and abundant credit that prevailed between the global financial crisis of 2008 and the COVID-19 pandemic has come to an abrupt end. Interest rates, which remained at record lows for over a decade, have surged significantly in recent years — pushing up debt-servicing costs and constraining public investment.
“Interest rates have increased considerably in global markets, and their path forward is highly uncertain,” the report noted. “As a result, governments are now facing higher repayment obligations, which are beginning to consume a growing share of national budgets.”
The Fund observed that in both advanced and emerging economies, a large portion of public spending remains rigid and difficult to adjust. It revealed that wage bills account for around 25% of total government expenditure in advanced economies, and 28% in emerging markets, while spending on pensions, healthcare, and education remains persistently high.
Fiscal experts warn that such structural spending pressures could undermine efforts to achieve sustainable debt levels unless governments introduce targeted reforms, expand revenue bases, and improve spending efficiency.
The IMF also cautioned that mounting fiscal imbalances could restrict governments’ ability to respond effectively to future economic shocks or crises. It urged policymakers to prioritize fiscal discipline, strengthen institutional frameworks, and build fiscal buffers to cushion against global uncertainty.
As global leaders debate economic policy at this week’s meetings, the message from the IMF is clear: without decisive action to rein in spending and stabilize public finances, the world may be heading toward its most precarious debt position in nearly eight decades.
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IMF Projects Global Debt to Hit Record Levels by 2029
The International Monetary Fund (IMF) has sounded the alarm over the world’s mounting public debt, projecting that the total global debt burden will surpass
