The International Monetary Fund (IMF) has warned that global public debt is on course to exceed 100 per cent of world GDP by 2029 — a level not seen since the aftermath of the Second World War.
Presenting the latest Fiscal Monitor in Washington on Wednesday, IMF Fiscal Affairs Director Vitor Gaspar cautioned that debt accumulation is accelerating across many economies.
“We expect global public debt to surpass 100 per cent of GDP by 2029,” he said. “The risks are widespread, and debt could grow even faster unless policymakers act decisively to contain it.”
Gaspar explained that years of ultra-low interest rates following the 2008 financial crisis and the COVID-19 pandemic made it easier for governments to sustain high debt levels. However, that landscape has shifted sharply.
“Interest rates have risen substantially, and the outlook is highly uncertain. The greatest concern now is financial instability triggered by fiscal-financial feedback loops,” he warned.
The IMF urged governments to pursue fiscal policies that ensure debt sustainability, enhance efficiency, and build buffers against future crises. It recommended that nations improve growth prospects by directing resources towards education, healthcare, infrastructure, and research rather than expanding overall budgets.
“Better governance and stronger institutions are essential,” Gaspar added. “They build trust in government and underpin both fiscal stability and economic growth.”
The Fiscal Monitor also presents new datasets tracking public spending efficiency and rigidity, showing that institutional reforms and prudent fiscal management can deliver significant long-term economic benefits.
