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Global Public Debt on Track to Reach $100 Trillion by Year’s End

October 21, 2024

The International Monetary Fund (IMF) is warning that the worldwide public debt situation may be more dire than most economists think, citing the skyrocketing fiscal deficits in the U.S. and China.

The agency is projecting that global public debt will top $100 trillion by the end of 2024, according to its annual Fiscal Monitor report. The same report estimates that by the end of the decade, global public debt will reach 100% of the world’s GDP.

China and the U.S. account for a significant portion of the world’s rising debt levels. If just those two countries are excluded from calculations, the IMF estimates that the global public debt-to-GDP ratio would fall to roughly 20%.

The report calls out a “fiscal policy trilemma” that governments around the world are facing. Namely, they are trying to navigate the need for more spending to ensure security and growth, but also facing resistance to higher taxation, even as debt levels become unsustainable. 

While the world’s leading economies–the U.S. and China–are contributing the most debt, it is developing economies like those in sub-Saharan Africa that are most under pressure, facing the need to spend to alleviate poverty and increase security, while also struggling with lower tax capabilities and worse financial conditions. 

 

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