IMF Warning: Global Public Debt Expected to Exceed $100 Trillion This Year

On October 25th, the International Monetary Fund (IMF) released a sobering report, stating that global public debt is expected to exceed $100 trillion this year. This figure not only sets a new historical record, but also reveals the severity of the accumulated risks of global public debt. The IMF called on countries to take more proactive measures to address this potential financial crisis in the report.

According to the latest forecast from the IMF, global public debt is expected to reach an unprecedented high of $100 trillion by 2024, which is equivalent to 93% of global GDP. This prediction not only reflects the enormous pressure currently facing the global economy, but also foreshadows potential financial risks in the future. The IMF pointed out in its report that despite a series of measures taken by countries in the past few years to address debt issues, current debt levels remain high and continue to rise.

The IMF emphasized in the report that the growth of global public debt is not achieved overnight, but is the result of multiple factors working together. First of all, the outbreak of the COVID-19 epidemic has had a serious impact on the global economy, leading governments to face the challenges posed by the epidemic through large-scale borrowing. Secondly, the sluggish global economic growth, tightening financial environment, and increasing economic and policy uncertainty have all exacerbated the growth of global public debt. In addition, the expenditure pressure of some countries in dealing with climate change, aging population, and security issues has further pushed up debt levels.

From the perspective of national debt situation, there are significant differences in debt levels between different countries. The debt of countries such as the United States, Brazil, France, Italy, South Africa, and the United Kingdom is expected to continue to increase, and these countries have a relatively high proportion of global public debt. The IMF specifically pointed out in the report that some countries, including the United States, are expected to see further debt increases, and their debt problems are particularly prominent.

Taking the United States as an example, the current fiscal deficit and debt levels are still on the rise. The latest data released by the Congressional Budget Office shows that the federal government's budget deficit for fiscal year 2024 reached $1.8 trillion, an increase of $139 billion compared to fiscal year 2023. Among them, the net interest expenditure on public debt increased by $240 billion compared to the previous fiscal year, with a growth rate of 34%, and the total expenditure was $950 billion. At present, the debt scale of the US government has exceeded $35 trillion, which is astonishing.

Besides the United States, other countries are also facing varying degrees of debt problems. Some emerging markets and developing economies may face greater challenges in dealing with debt crises, as their fiscal space and financing capabilities are relatively limited. The IMF pointed out in the report that these countries need to take more flexible and innovative measures to address their debt problems in order to avoid falling into a debt crisis.

Faced with the continuous rise of global public debt, the IMF issued a strong warning in its report. The IMF pointed out that the current fiscal adjustment plan is not sufficient to significantly reduce or stabilize debt. From 2023 to 2029, a cumulative tightening of fiscal policy by 3.8% of GDP is required to achieve stable or reduced debt. However, the implementation of this plan is extremely difficult and requires tremendous efforts from governments around the world.

The IMF called on governments around the world to take more proactive measures to address debt issues in its report. Firstly, governments around the world need to control debt growth and avoid excessive borrowing that could lead to debt crises. Secondly, countries should strengthen fiscal discipline, improve the efficiency and transparency of fiscal expenditures, and ensure that funds are used where they are most needed. In addition, the IMF also recommends that governments enhance fiscal sustainability by reforming tax systems and increasing tax revenue.

In addition to the above measures, the IMF also emphasizes the importance of international cooperation. In the context of global economic integration, the economic connections between countries are becoming increasingly close, and debt issues are also showing cross-border characteristics. Therefore, countries need to strengthen international cooperation and jointly address debt issues. The IMF expressed its willingness to provide technical support and policy advice to countries to help them develop and implement effective debt management strategies.

The continuous rise of global public debt has become a major challenge facing the current global economy. The IMF's warning and appeal have sounded the alarm for us, reminding us to take more proactive measures to address this potential financial crisis. Countries should strengthen fiscal discipline, improve fiscal expenditure efficiency, enhance fiscal sustainability, and jointly address debt issues through international cooperation. Only in this way can we ensure the stability and sustainable development of the global economy. In the days to come, we will closely monitor the development of global public debt and continue to bring the latest international financial news and analysis to our readers. I hope that all countries can take the IMF's warning and call seriously, take practical and effective measures to address the debt problem, and contribute to the stability and sustainable development of the global economy.