Introduction
According to the International Monetary Fund (IMF), global public debt will rise by 2.8 percentage points by 2025 – more than twice as fast as the increase projected for 2024. This will bring global debt levels to over 95 percent of Gross Domestic Product (GDP).
Increasing Indebtedness: A Look into the Future
This upward trend in public debt is expected to continue. By the end of the decade, public debt could reach nearly 100 percent of GDP, exceeding the levels seen during the pandemic. The IMF also warns of a worse scenario: under adverse conditions, public debt could rise to as much as 117 percent of GDP by 2027, marking the highest level since World War II.
Impact on Global Markets
This rapid increase in public debt has direct effects on global markets and future interest rate policies. Higher debt levels may increase pressure on central banks to adjust interest rates to control inflation and ensure financial stability. Furthermore, rising indebtedness can influence investor confidence, thus causing volatility in financial markets.
Summary Thoughts
- Global public debt will rise by about 2.8 percentage points in 2025 – more than twice as fast as in 2024.
- Total indebtedness will be over 95% of global GDP.
- By the end of the decade, it could be nearly 100%, or in the worst case, reach up to 117%.
- This represents a historically high level with potential implications for interest rate policy and financial markets worldwide.