IMF warns of soaring global debt levels as countries face tough economic choices

THE International Monetary Fund (IMF) has issued a stark warning that over one-third of countries are set to experience an increase in public debt by 2025, compared to the previous year.

- SIPHELELE DLUDLA

The concerns arise amidst escalating uncertainties and significant policy shifts that are altering economic and fiscal landscapes globally.

According to the IMF’s Fiscal Monitor report released on Wednesday, these economies collectively represent about 75% of global GDP and included major players— China and the United States— as well as Australia, Brazil, France, Germany, Indonesia, Italy, Mexico, Russia, Saudi Arabia, South Africa, and the United Kingdom. The Fiscal Monitor projects global public debt to increase by 2.8 percentage points this year—more than twice the estimate for 2024—pushing debt levels above 95% of world gross domestic product.

Vitor Gaspar, IMF director for the fiscal affairs department, said global public debt was high and rising.

Gaspar said policymakers were facing tough tradeoffs between reducing debt, meeting urgent spending needs and maintaining growth. She said getting fiscal policy right was essential at a time of heightened uncertainty.