IMF: Global public debt will reach $100 trillion by the end of 2024

According to the International Monetary Fund (IMF)'s latest analysis, global public debt will reach 100 trillion dollars by the end of this year, accounting for 93% of global GDP.

The IMF said in its latest “Fiscal Monitor” (Overview of Global Public Finance Developments) that debt is expected to approach 100% of GDP by 2030, and warns that governments will need to make difficult decisions to stabilize borrowing.

The debt of the United States, Brazil, France, Italy, South Africa, and the United Kingdom will increase, according to the IMF report, which urges governments to control debt.

“Waiting is risky: countries' experience shows that high debt can trigger adverse market reactions and limit budget room for maneuver in the face of negative shocks,” the report said.

The IMF said that under pressure to fund clean energy, support an aging population, and strengthen security, there is little political will to cut spending, and “the risk of debt prospects is seriously trending upward.”

Countries whose debt is not expected to be stable account for more than half of global debt, or about two-thirds of global GDP.

Using the “debt risk” framework, the IMF found that under extremely unfavorable circumstances, future debt levels could reach 115% of GDP within three years, nearly 20 percentage points higher than the baseline forecast. “This is because current high debt levels amplify the impact of weak growth or tighter financial conditions and higher interest spreads on future debt levels.”

The debt risk index for developed economies has declined from its peak during the COVID-19 pandemic and is currently estimated at 134% of GDP, but the debt risk index for emerging markets and developing economies has risen to 88%.

The IMF said that although slowing inflation and falling interest rates have provided a window for governments to rectify the fiscal order, there is little indication that there is any urgency in this regard.

“The current fiscal adjustment plan falls far short of what is needed to ensure a high probability of stabilizing (or reducing) debt,” it said.