Global debt threat: IMF urges smarter public spending for SA

A troubling picture of deteriorating fiscal conditions emerges around the world

- SIPHELELE DLUDLA

VITOR Gaspar, director of the IMF fiscal affairs department, said public debt continues to rise as governments face mounting fiscal strain from higher defense spending, aging populations, and elevated interest rates. I Supplied

(I Supplied)

THE International Monetary Fund (IMF) has issued a stark warning that global public debt is on track to exceed 100% of GDP by 2029, reaching its highest level since the aftermath of World War II.

The Fund's latest Fiscal Monitor report, released yesterday in Washington, D.C., paints a troubling picture of deteriorating fiscal conditions, rising borrowing costs, and deepening debt vulnerabilities across both advanced and developing economies.

Vitor Gaspar, director of the IMF fiscal affairs department, said public debt continues to rise as governments face mounting fiscal strain from higher defense spending, aging populations, and elevated interest rates.

"Global public debt prospects and risks have worsened since our last meeting in April. In such a scenario, debt would be at its highest level since 1948," Gaspar said.

"Moreover, the distribution of risks is tilted towards debt accumulating even faster with a 5% probability that global debt could reach 124% of GDP by 2029."

The IMF's fiscal risk assessment map, based on its latest debt sustainability framework, shows a highly uneven global debt landscape.