IMF Forecasts Significant Rise in Global Public Debt

The International Monetary Fund (IMF) has released a startling report indicating a projected increase in global public debt by 2.8 percentage points in 2025. This marks a significant jump, more than doubling the estimates for 2024, and is expected to elevate debt levels to 95% of gross domestic product (GDP).

Long-term Debt Trends and Policy Uncertainties

According to the IMF, the upward trajectory of public debt is not expected to halt anytime soon. With projections suggesting that debt could near 100% of GDP by the decade's end, surpassing even the peaks seen during the pandemic. These forecasts incorporate the latest tariff announcements from February 1 to April 4, yet the IMF cautions that the volatile nature of trade policies could lead to even higher debt levels.

US Budget Deficit: A Silver Lining?

Amid these global concerns, the United States offers a glimmer of hope. The budget deficit is anticipated to decrease to 6.5% of GDP this year, with a further reduction to 5.5% by 2026. This is a notable improvement from the 7.3% recorded in 2024, signaling potential fiscal resilience in the face of global debt challenges.