Global Public Debt to Surpass $100 Trillion in 2024, IMF Reports
| Summary/Static | Details |
|---|---|
| Why in the news? | According to a report released by the International Monetary Fund (IMF), the world's total public debt is poised to surpass $100 trillion this year for the first time. |
| Debt-to-GDP Ratio | Projected to reach 93% of global GDP by the end of 2024 and approach 100% by 2030, surpassing the 99% peak seen during the COVID-19 pandemic. |
| Comparison to Pre-Pandemic Levels | Debt is anticipated to increase by 10 percentage points from 2019 levels. |
| Political Influence on Spending | Political sentiment in the U.S. and other major economies is leaning towards higher spending, contributing to accelerated debt growth. |
| Spending Pressures | Includes green transition initiatives, aging populations, security concerns, and ongoing development challenges. |
| Fiscal Policy Uncertainty | Growing uncertainty in fiscal policy due to entrenched political red lines on taxation. |
| U.S. Presidential Election Impact | Both candidates' proposed tax cuts and spending plans could significantly increase federal deficits. Donald Trump's plans could add $7.5 trillion, while Kamala Harris's plans could add $3.5 trillion. |
| Historical Underestimation of Debt | Realized debt-to-GDP ratios are, on average, 10% higher than initially forecasted five years prior. |
| Potential Risks to Debt Levels | Weak economic growth, tighter financing conditions, and increased fiscal and monetary policy uncertainty in key economies like the U.S. and China could further elevate debt levels. |
| Severely Adverse Scenario | Global public debt could rise to 115% of GDP within three years, 20 percentage points higher than current projections. |