IMF Fiscal Monitor Report Projects 2.8% Hike in Global Debt by Close of 2025
The International Monetary Fund (IMF) has raised fresh concerns over the trajectory of global public debt, forecasting a rise of 2.8 percentage points of GDP by the close of 2025.
According to the Fund’s April 2025 Fiscal Monitor Report, global debt is expected to approach 100 percent of GDP by the end of the decade surpassing levels recorded at the height of the COVID-19 pandemic.
The Fund revealed that over one-third of countries globally are projected to record an increase in debt levels in 2025 compared to 2024. These nations, which collectively account for approximately 75 percent of global GDP, include economic powerhouses such as China and the United States.
The IMF’s analysis also highlights growing systemic vulnerabilities. It reports that the global debt-at-risk measured three years ahead and reflecting multiple risk determinants to the end of 2024, has increased by 2 percentage points of GDP.
Under a severe adverse scenario, the IMF warns that global public debt could escalate to approximately 117 percent of GDP by 2027, a level not seen since the end of World War II, and 20 percentage points above baseline projections for that year.
The Fund in its report, attributed the rising debt levels to multiple macroeconomic headwinds, including declining revenues and output losses resulting from escalating tariffs and growing global uncertainty.
“Elevated geoeconomic uncertainties may further increase public debt by pushing up spending, particularly in defense,” the report noted.
The IMF further cautioned that tightening and increasingly volatile financial conditions in the United States may have ripple effects across emerging markets and developing economies (EMDEs), potentially increasing financing costs and exerting downward pressure on commodity prices.
The Fund’s latest warnings come at a time when many economies, especially in Sub-Saharan Africa, are already grappling with constrained fiscal space, high debt servicing costs, and limited access to international capital markets.
In light of these developments, the IMF is urging policymakers to adopt prudent fiscal frameworks, enhance revenue mobilisation, and build buffers to withstand future shocks.
