The International Monetary Fund IMF has projected that global public debt will reach an unprecedented 100 trillion this year, cautioning that the fiscal outlook for many countries may be worse than expected.
In its latest fiscal policy report, the IMF anticipates that global public debt will amount to 93 of the world's gross domestic product GDP in 2024, and is likely to approach 100 of GDP by 2030-a rise of 10 percentage points compared to 2019 levels before the onset of the Covid-19 pandemic.
Global public debt is very high, stated Era Dabla-Norris, Deputy Director of the IMFs Fiscal Affairs Department, during a press briefing. She emphasised that the debt burden could potentially exceed current projections, citing spending pressures related to climate change, overly optimistic debt forecasts, and unidentified debts as contributing factors.
So the bottom line is that its time for countries to get their fiscal house in order, she urged.
The IMFs report introduced a new debt-at-risk methodology to better assess risks associated with debt projections. It warned that, in a worst-case scenario, global public debt could rise to 115 of GDP by 2026 - nearly 20 percentage points higher than the Fund's baseline forecast.
