IMF WARNS AGAINST GLOBAL PUBLIC DEBT
The International Monetary Fund has warned that global public debt is set to climb to nearly 100 percent of global GDP by 2030 — a level not seen since World War II — driven by rising US tariffs, geopolitical tensions, and increased fiscal strain. In its Fiscal Monitor report released during the Spring Meetings in Washington, the IMF projected a 2.8 percentage point jump in global public debt in 2025 alone.
Under a worst-case scenario, debt could rise to 117 percent of GDP by 2027, nearly 20 points above current projections. “Major policy shifts underway have heightened global uncertainty,” the report said, citing increased tariffs by the United States and retaliatory measures from other countries as triggers for weakening global trade, growth, and financial stability.
The IMF said public debt would rise even faster in developing countries where financing costs are rising and social spending is being cut. Defense expenditures, economic stagnation, and falling revenues from weakened trade are expected to accelerate the trend. Meanwhile, interest rate hikes in major economies are placing additional pressure on developing nations with limited fiscal space.
Reduced aid from advanced economies is also compounding the situation, leaving low-income nations more vulnerable. In a chilling assessment, the IMF said even temporary spikes in global tensions or trade restrictions could push debt up by an additional 4.5 percent of GDP within a few years.
