“Global debt, 100% of GDP by the end of the decade” - According to the IMF, tariff pressures will push it beyond pandemic levels
Economic pressures from new high US tariffs will push global public debt above pandemic-era levels, to nearly 100% of global GDP by the end of the decade, the International Monetary Fund reported.
The IMF Fiscal Monitor projected that global public debt will increase by 2.8 percentage points, to 95.1% of global GDP in 2025. The upward trend is likely to continue, reaching 99.6% of global GDP by 2030.
Global public debt peaked in 2020 at 98.9% of GDP as governments borrowed heavily to combat COVID-19 and output shrank. Debt fell by 10 percentage points in two years. But it has risen again, and the latest forecast showed it accelerating.
"Tariff announcements by the United States, countermeasures by other countries, and exceptionally high levels of political uncertainty are contributing to a worsening outlook and increasing risks," the IMF said.
The report added that this leaves governments facing more difficult trade-offs, as their budgets are overwhelmed by higher needs for defense spending, demands for more social support and rising debt-servicing costs.
Government annual fiscal deficits are projected to average 5.1% of GDP in 2025, compared with 5.0% in 2024, 3.7% in 2022 and 9.5% in 2020, according to the report.
Slower growth, more debt
The budget outlook is based on the IMF's "baseline forecast" of global GDP growth of 2.8% this year in its Economic Outlook, which includes tariff developments through April 4. The economic and fiscal outlook would worsen if higher tariffs from President Donald Trump and retaliatory measures take effect.
Debt levels could rise above 117% by 2027, under a very adverse scenario, “if incomes and economic output fall more sharply than currently projected due to increased tariffs and weakened growth prospects.” Debt at that level would represent the highest share of GDP since World War II, the IMF said.
Most of the debt growth is concentrated in the largest economies. About a third of the IMF's 191 member countries now have debt that is growing faster than before the pandemic. These countries account for about 80% of global GDP, the IMF says.
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