The global gross public debt is expected to reach about 94% of Gross Domestic Product (GDP) in 2025 and, on an unchanged trajectory, is projected to reach 100% by 2029, according to the latest edition of the “Public Finance Monitor” from the International Monetary Fund (IMF).
This report, released during the IMF and World Bank Group Spring Meetings taking place this week in Washington, highlights that “the dynamics of global public debt have not significantly improved in 2025,” noting that the conflict in the Middle East has added “a new source of fiscal tension to an already tense global landscape.”
In addition to these temporary tensions, the IMF believes that the trajectory driven by current budget parameters is a major cause for concern.
“The rise in interest rates and the increased market volatility in fiscal policy indicate that the room to maneuver within this trajectory is narrowing,” explains the financial institution.
Furthermore, the global budget gap, defined as the difference between projected primary balances and levels required to stabilize the debt ratio, has almost disappeared, moving from a surplus of over 1% of GDP a decade ago to nearly zero today.
According to the international financial institution, this development represents a structural deterioration, reflecting political choices that have increased permanent expenses, particularly social ones, or reduced revenues, especially in some of the world’s largest economies.
Moreover, the IMF emphasizes that even in countries where debt dynamics have improved, public debt levels remain, in many cases, higher than at the peak during the Covid-19 crisis.
Added to this is a significant increase in interest payments, rising from 2% to nearly 3% of global GDP over four years due to debt refinancing at higher rates, according to the same source.
The IMF also notes that budget prospects have deteriorated since the April 2025 edition of the “Public Finance Monitor.” Globally, the debt is currently hovering around 117% of GDP, signaling an increase in the risks of downgrading.
In this context, several interconnected factors are likely to further impact budget prospects. According to the IMF, “the conflict in the Middle East is expected to increase tensions on public finances by causing an increase in food and fuel prices, tightening financial conditions, slowing economic activity, and increasing defense spending.”
Based in Washington, the institution’s projections indicate that an extension of the conflict could lead to an additional 4 percentage point increase in global debt at risk.
