IMF: Global public debt will reach 100 trillion US dollars in 2024, accounting for 93% of global GDP

Zhitong Finance learned that according to the latest analysis by the International Monetary Fund (IMF), by the end of this year, global public debt will reach 100 trillion US dollars, accounting for 93% of global GDP. The International Monetary Fund said in its latest Fiscal Monitor (Fiscal Monitor) report that debt is expected to be close to 100% of GDP by 2030, and warns that governments will need to make difficult decisions to stabilize borrowing. The Fiscal Monitor is an overview of global public finance developments.

According to the IMF report, the debt of the United States, Brazil, France, Italy, South Africa and the United Kingdom is expected to increase. The report urges governments to control debt. “Waiting is risky: countries' experience shows that high debt can trigger adverse market reactions and limit room for budget 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 the global debt share, or about two-thirds of global GDP.

Using the “risky debt” framework, the IMF found that under extremely unfavorable circumstances, future debt levels could reach 115% of GDP within three years, which is nearly 20 percentage points higher than the benchmark forecast. The organization said: “This is because the current high level of debt amplifies the impact of slowing growth or a tightening financial environment and rising interest spreads on future debt levels.”

Debt risk indicators for developed economies have declined from the peak of the pandemic and are currently estimated at 134% of GDP, but debt risk indicators for emerging markets and developing economies have 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 sign 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,” the organization said.