The global gross public debt has risen to nearly 94% of Gross Domestic Product (GDP) in 2025 and, on an unchanged trajectory, is expected to reach 100% by 2029, according to the latest edition of the International Monetary Fund (IMF)’s “Monitor of Public Finances.”
In this report, published during the IMF and World Bank Group Spring Meetings held this week in Washington, the Bretton Woods institution highlights that “the dynamics of global public debt did not improve significantly in 2025,” noting that the outbreak of conflict in the Middle East has added “a new source of budgetary tension to an already tense global landscape.”
Apart from these current tensions, the IMF believes that the trajectory resulting from current budget parameters is a major concern.
“The rise in interest rates and increased market reactivity to fiscal news suggest that the room to maneuver within this trajectory is narrowing,” explains the financial institution.
Furthermore, the global fiscal gap, which is the difference between projected primary balances and the levels required to stabilize the debt ratio, has nearly disappeared, going from over 1% of GDP a decade ago to close to zero today.
According to the international financial institution, this development represents a structural deterioration, indicating policy choices that have increased permanent expenditures, particularly in social areas, or reduced revenues, especially in some of the largest economies.
Additionally, the IMF points out that even in countries where debt dynamics have improved, public debt levels remain, in many cases, higher than the peaks recorded during the Covid-19 crisis.
To this is added a marked increase in interest payments, rising from 2% to close to 3% of global GDP over four years, due to debt refinancing at higher rates, notes the same source.
The Fund also observes that budgetary prospects have deteriorated since the April 2025 edition of the “Monitor of Public Finances.” Globally, the debt-to-GDP ratio currently stands at around 117%, signaling an increased risk of degradation.
In this context, several interconnected factors are likely to further weigh on budgetary prospects. According to the IMF, “the conflict in the Middle East is likely to further exacerbate tensions on public finances by causing an increase in food and fuel prices, tightening financial conditions, slowing economic activity, and increasing defense spending.”
According to projections from the Washington-based institution, an extension of the conflict could lead to an additional 4 percentage point increase in global debt at risk.
