The global gross public debt is projected to reach nearly 94% of Gross Domestic Product (GDP) by 2025 and, on an unchanged trajectory, is expected to reach 100% by 2029, according to the latest edition of the International Monetary Fund (IMF)’s “Public Finance Monitor”.
The report, released during the IMF and World Bank Group Spring Meetings in Washington this week, highlights that “the dynamics of global public debt did not significantly improve in 2025,” noting that the outbreak of conflict in the Middle East added “a new source of budgetary tension to an already tense global landscape.”
Beyond these temporary tensions, the IMF believes that the trajectory induced by current budgetary parameters is a major concern.
“The increase in interest rates and heightened market reactivity to fiscal news suggest that the space to cope with this trajectory is narrowing,” explains the financial institution.
In addition, the global fiscal gap, which is the difference between projected primary balances and levels needed to stabilize the debt ratio, has practically vanished, moving from over 1% of GDP a decade ago to nearly zero today.
According to the IMF, this shift represents a structural deterioration, reflecting policy choices that have increased permanent spending, especially social expenses, or reduced revenues, particularly in some of the largest economies.
Moreover, the IMF emphasizes that even in countries where debt dynamics have improved, public debt levels remain, in many cases, higher than those recorded during the Covid-19 crisis.
This is accompanied by a significant rise in interest payments, increasing from 2% to nearly 3% of global GDP in four years due to debt refinancing at higher rates, notes the same source.
Furthermore, the IMF points out that fiscal prospects have deteriorated since the April 2025 edition of the “Public Finance Monitor.” Globally, the debt-to-risk ratio currently stands at around 117% of GDP, signaling an increase in degradation risks.
In this context, several interconnected factors are likely to further weigh on fiscal prospects. According to the IMF, “the conflict in the Middle East could further heighten pressures on public finances by causing an increase in food and fuel prices, tightening financial conditions, slowing activity, and increasing defense spending.”
According to Washington-based institution’s projections, an extension of the conflict could result in an additional 4 percentage point increase in global debt risk.
