IMF: global debt is approaching a record since 1948, Ukraine will cross 110% of GDP

Global public debt will exceed 100% of global gross domestic product by the end of 2029. In this case, this figure will reach a record high since 1948, the International Monetary Fund reported in october report Fiscal Monitor.

This is a worse scenario than was predicted before the coronavirus pandemic.

In the worst-case scenario (with a 5% probability), the debt will reach 124% in 2029.

In many of the largest economies, public debt already exceeds – or is projected to exceed – 100% of GDP. While the number of such countries is expected to gradually decline over the next five years, their share of global GDP is expected to grow.

This group includes Canada, China, France, Italy, Japan, the United Kingdom, and the United States. These countries have deep and liquid government bond markets and a wide range of fiscal policy instruments, which makes their debt risk moderate.

Smaller countries are facing much more acute fiscal difficulties, even though their debt is relatively small.

More than 55 countries are experiencing a debt crisis or are at high risk, although their debt is below 60% of GDP.

Ukraine's public debt is also on its way to exceeding 100% of GDP. This has already happened or may happen before the end of 2025.

Before the outbreak of the full-scale war, Ukraine was able to reduce its public debt to 48.9% of GDP, but since then it has grown significantly and, according to IMF estimates, will reach 108.6% this year, exceed 110% in 2026, and then begin to gradually decline.

The IMF points out that the debt situation has changed dramatically compared to the period between the 2008 global financial crisis and the pandemic. Back then, debt growth was accompanied by lower interest rates, which stabilized debt service costs.

Interest rates have risen significantly on global markets, and their future trajectory is highly uncertain. Debt service costs are already putting pressure on budgets.

At the same time, spending on defense, disaster relief, new technologies, demographic change, and development is growing. All this is happening against the backdrop of political resistance to tax increases.

The IMF recommends that countries reorient public spending to education and infrastructure, improve spending efficiency and governance, and that countries with insufficient tax capacity gradually increase tax revenues above 15% of GDP.