Public debt levels could outgrow the world economy within five years, IMF chief Kristalina Georgieva has said
Global public debt will exceed the size of the world economy within five years, IMF chief Kristalina Georgieva warned on Wednesday, calling the trend a “sobering reality” for policymakers worldwide.
Public debt refers to the total debt held by governments, businesses, and households. Georgieva said the surge in borrowing is driven by fiscal deficits, pandemic legacies, and rising interest costs in both advanced and emerging economies.
“Global public debt is projected to exceed 100% of GDP by 2029,” Georgieva said in a speech broadcast on the IMF’s official YouTube channel. She warned that rising debt risks inflating interest costs, pushing up rates, limiting spending, and weakening the global governments’ ability to absorb shocks.
The warning comes amid soaring US federal debt, with Washington running persistent deficits despite high interest rates. As of October, it has hit a record $37 trillion, around 125% of GDP, with interest payments now one of the largest federal expenses, exceeding defense spending.
The administration of President Donald Trump has defended the borrowing as vital for growth and domestic programs; critics warn it risks a fiscal crunch. The IMF earlier cautioned that unchecked spending could drive up global borrowing costs and destabilize emerging markets.
Georgieva’s remarks came alongside broader warnings about the global economy, which she said is doing “worse than we need,” noting that deep structural shifts in geopolitics, technology, and demographics have made economic uncertainty “the new normal.”
“Global resilience has not yet been fully tested. And there are worrying signs the test may come,” Georgieva said, pointing to mounting warning signs – including a surge in gold prices, which hit a record $4,000 per ounce on Wednesday, and soaring valuations for US stocks, reminiscent of the dotcom bubble 25 years ago. Georgieva also warned about the impact of Trump’s tariffs, saying their “full effect is still to unfold.”
In its July 2025 Outlook, the IMF projected global growth of 3.0% in 2025 and 3.1% in 2026, slightly above earlier forecasts. It warned that fiscal strains, trade fragmentation, and inflated asset prices could derail recovery unless governments curb deficits and rebuild buffers. Georgieva said a new update will be released next week.
