Global public debt is on track to surpass 100% of GDP by the end of the decade, with the International Monetary Fund (IMF) projecting a steady rise in debt levels that could reach even higher levels under worst-case scenarios. The IMF’s fiscal monitor, released today, warns that public debt is climbing faster than expected, largely due to rising protectionist measures, particularly those from the United States, which have dampened global growth.
According to the IMF’s latest report, global public debt is set to grow by at least 2.8 percentage points this year, reaching 95% of global GDP — a figure double the rate predicted just six months ago. The IMF now expects this growth trajectory to push global debt levels past the 100% mark by 2030. In its most extreme scenario, the IMF warns that global public debt could climb to 117% of GDP within the next two years, a level not seen since the aftermath of World War II.
The IMF attributes this alarming rise in debt to a combination of factors: the slowdown in global economic growth, worsened by trade protectionism and escalating tariffs from the US; market volatility that has pushed up borrowing costs for governments; and increased spending pressures in areas such as defense.
One of the key drivers of this global debt surge is the soaring tariffs announced by the United States on April 2, 2025, which are expected to have a ripple effect across economies worldwide. The IMF warns that countermeasures from other nations, coupled with escalating uncertainty and tighter financial conditions, will exacerbate the risks associated with rising public debt.
“The debt risks are heightened by the combination of tariff-induced uncertainty, higher borrowing costs, and a global slowdown,” the report stated. “This will lead to an unsustainable rise in public debt levels unless governments take decisive action.”
Countries already burdened with high levels of public debt have been urged by the IMF to implement new measures to raise revenue, including tax increases. For nations like the UK, which faces growing fiscal stress, the IMF recommends broadening the tax base by eliminating exemptions and improving the efficiency of tax expenditure. This is part of a wider effort to manage fiscal sustainability as debt levels continue to rise.
The IMF’s projections for key countries:
- United Kingdom: The UK’s public debt ratio is expected to peak at 97.4% of GDP by 2029, up from the current estimate of 93.7%. The UK is one of several major nations, alongside the US, Brazil, China, and France, contributing significantly to the increase in global public debt.
- United States: The US is expected to see its public debt increase from around 122% of GDP today to 128% by the end of the decade. While the Biden administration has indicated that tariff revenues will help narrow the fiscal deficit, the IMF cautions that this revenue stream is uncertain. As tariffs reduce demand for foreign goods, tariff revenues are likely to fall, exacerbating fiscal challenges.
- France: The IMF projects that France’s debt ratio will remain similar to the US, with its debt rising to 128% of GDP by 2030.
While the IMF remains cautious about the long-term impacts of rising debt, the report also emphasizes the importance of timely fiscal reforms. Without action to boost revenue and control spending, countries may face a future of higher borrowing costs and fiscal instability. The IMF’s call for reform is especially urgent in light of the geopolitical uncertainties and global trade disruptions caused by the ongoing rise in protectionist policies.
