IMF sees global public debt at 100% of GDP by 2029, level last seen after World War II

The International Monetary Fund (IMF) said Wednesday that global public debt is expected to reach 100% of GDP by 2029, a level seen only in the aftermath of World War II.

The Fund said there was no significant improvement in global public debt dynamics in 2025, while the war in the Middle East added a new source of fiscal pressure to an already strained global environment, according to the April edition of its Fiscal Monitor.

The report said the conflict has had major global repercussions by disrupting energy supplies, tightening financial conditions and forcing governments to choose between containing price increases and preserving fiscal space. It stressed that the fiscal effect has been highly asymmetric across countries.

The IMF also said that although the sharp rise in policy uncertainty that dominated the economic outlook a year ago has eased from its peak, underlying fiscal and geopolitical pressures have not subsided.

Despite the resilience of the global economy, the fiscal outlook has worsened, according to the report. Global gross public debt rose to 93.9% of GDP in 2025 and, under the current trajectory, is projected to climb to 95.3% in 2026; 97.2% in 2027; 98.8% in 2028 and 100% in 2029.

The report said that beyond the already high level of global debt, the path implied by current fiscal settings remains a central concern. Higher interest rates and greater market sensitivity to fiscal news suggest that room to absorb further shocks has narrowed.

It noted that even in countries where debt dynamics have improved, public debt levels in many cases remain above peaks seen during the coronavirus crisis. Interest payments, meanwhile, have risen sharply from 2% of global GDP to nearly 3% in just four years.

The IMF said the US is running an overall public deficit equivalent to 7% to 8% of GDP and appears to have no debt consolidation plan in place. It projected US gross public debt to reach 142.1% of GDP by 2031.

China, meanwhile, has expanded fiscally in the short term to support domestic demand amid deflationary pressures, pushing its overall deficit to around 8% of GDP, according to the report. Continued large deficits are expected to lift China’s debt to 126.8% of GDP by 2031.

The IMF warned that the war in the Middle East threatens to reinforce adverse financial and commodity price dynamics through higher global interest rates, a stronger US dollar and rising energy prices, increasing macroeconomic pressures on emerging market and developing economies.

It said public finances could come under even greater strain through higher food and fuel prices, tighter financial conditions, weaker economic activity and rising defense spending. In a prolonged conflict scenario, global debt at risk could increase by 4 percentage points.