IMF Projects Global Public Debt to Surpass $100 Trillion by 2024, Approaching 100% of GDP by 2030
According to the IMF’s September 2024 Fiscal Monitor, global public debt is set to exceed $100 trillion, representing approximately 93% of global GDP by the end of 2024. The trajectory suggests a continued rise, potentially nearing 100% of GDP by 2030. While debt is expected to stabilize or decline in about two-thirds of countries, it will remain significantly above pre-pandemic levels. Alarmingly, countries projected to see no stabilization in their debt levels account for more than half of global debt and roughly two-thirds of global GDP.
The report points to a myriad of factors that could drive future debt levels higher than currently anticipated. In recent decades, political discussions around fiscal policy have increasingly favored higher government spending. This trend, coupled with heightened fiscal policy uncertainty and entrenched positions on taxation, complicates the debt landscape. Moreover, growing demands for spending on green transitions, an aging population, security concerns, and persistent developmental challenges are exerting additional pressure on public finances.
Historical data suggests that projections of debt-to-GDP ratios tend to underestimate actual outcomes; on average, realized ratios three years ahead surpass initial estimates by six percentage points. The report highlights that risks to the debt outlook are heavily weighted to the upside, necessitating more substantial fiscal adjustments than currently planned to achieve a high probability of stabilizing or reducing debt levels. Rebuilding fiscal buffers while promoting economic growth is deemed essential for sustainable public finances and overall financial stability.
The Fiscal Monitor also indicates that global debt-at-risk—defined as future debt levels in extreme adverse scenarios—could reach 115% of GDP by 2026, nearly 20 percentage points above baseline projections. The current high debt levels amplify the negative effects of weaker growth and tighter financial conditions, further exacerbating future debt dynamics.
Variability in debt-at-risk is notable between countries. For advanced economies, the estimated debt-at-risk three years ahead stands at 134% of GDP, showing a slight decline from pandemic peaks. In contrast, emerging markets and developing economies face an increase, with debt-at-risk estimated at 88% of GDP. These differences reflect a combination of higher initial debt levels in advanced economies and significant primary deficits in major economies like the United States and China.
Additionally, the report emphasizes that global factors increasingly drive fluctuations in government borrowing costs across nations. This interconnectedness implies that high debt levels and uncertainty surrounding fiscal and monetary policy in key countries could lead to greater volatility in sovereign yields and heightened debt risks for others.
Unidentified debt—changes in debt not explained by interest-growth differentials, budgetary deficits, or exchange rate movements—presents another potential risk. The chapter notes that unidentified debt has historically been substantial, averaging 1.0% to 1.5% of GDP per year, with increases of up to 7 percentage points of GDP observed following financial crises. This is primarily attributed to the realization of contingent liabilities and other fiscal risks.
