The gross global public debt is expected to reach nearly 94% of Gross Domestic Product (GDP) in 2025 and, if the current trajectory remains unchanged, it is projected to hit 100% by 2029, according to the latest edition of the International Monetary Fund’s (IMF) “Public Finance Monitor”.
In this report released during the IMF and World Bank Group Spring Meetings in Washington this week, the Bretton Woods institution highlights that “the dynamics of global public debt did not notably improve in 2025,” noting that the conflict in the Middle East has added “a new source of fiscal tension to an already tense global landscape.”
Beyond these temporary tensions, the IMF believes that the path driven by current fiscal parameters is a major concern.
“The rise in interest rates and increased market volatility in fiscal news suggest that the room to handle this trajectory is narrowing,” explains the financial institution.
Furthermore, the global fiscal gap, which is the difference between projected primary balances and the levels needed to stabilize the debt ratio, has almost disappeared, going from over 1% of GDP a decade ago to nearly zero today.
According to the international financial institution, this shift represents a structural deterioration, indicating policy choices that have increased permanent expenditures, particularly social ones, or reduced revenues, especially in some of the largest economies.
Additionally, the IMF highlights that even in countries where debt dynamics have improved, public debt levels remain, in many cases, higher than the peaks recorded during the Covid-19 crisis.
Moreover, there has been a marked increase in interest payments, rising from 2% to nearly 3% of global GDP in the span of four years, due to debt refinancing at higher rates.
The IMF also notes that fiscal outlooks have worsened since the April 2025 edition of the “Public Finance Monitor.” Globally, the debt-to-GDP ratio is currently around 117%, signaling increased degradation risks.
In this context, several interconnected factors are likely to further weigh on fiscal outlooks. According to the IMF, “the conflict in the Middle East could further intensify fiscal pressures by causing a rise in food and fuel prices, tightening financial conditions, slowing activity, and increasing defense expenditures.”
Based on projections from the Washington-based institution, an extension of the conflict could lead to an additional 4 percentage point increase in global debt at risk.
