Global public debt is on a trajectory to surpass pandemic-era levels, with projections indicating it will reach 95.1% of global GDP in 2025 and approach 100% by 2030, according to the International Monetary Fund's (IMF) latest Fiscal Monitor report released on April 23, 2025. This anticipated increase is driven by factors including steep U.S. tariffs, slower economic growth, and heightened trade tensions.

The IMF's report highlights that global public debt, which peaked at 98.9% of GDP in 2020 due to COVID-19 relief measures, had subsequently declined but is now on the rise again. The resurgence is attributed to new tariffs and retaliatory measures that are intensifying policy uncertainty and straining government budgets. These budgets are also contending with demands for higher defense and social spending, as well as increased debt servicing costs. In severe scenarios, the IMF warns that global debt could exceed 117% of GDP, a level not seen since World War II.

Vítor Gaspar, Director of the IMF’s Fiscal Affairs Department, emphasized the gravity of the situation, stating, "If trade tensions continue to intensify, public debt could rise from 92.3% to 117% of global GDP by 2027." This projection underscores the potential for escalating debt levels if current trade disputes persist.

The report also notes that while the United States may see a slight improvement in budget deficits due to economic growth and tariff collections, risks remain if tax cuts are extended. The IMF advises nations to pursue prudent fiscal consolidation to build resilience against future economic shocks.

Emerging economies are particularly vulnerable in this environment. The IMF has revised its economic growth outlook for these economies downward, citing factors such as U.S. trade tariffs and increased fiscal challenges. This environment limits their ability to maintain essential public expenditures and invest in development projects.

The Global Sovereign Debt Roundtable, co-chaired by the IMF, World Bank, and South Africa, has highlighted the need for improved debt restructuring processes and greater debt transparency to address these challenges. The roundtable stressed the need for better information sharing and transparency regarding creditor agreements and post-restructuring credit rating developments.

To mitigate the risks associated with rising public debt, the IMF recommends that nations pursue fiscal consolidation efforts to build resilience against future economic shocks. This involves implementing policies that reduce fiscal deficits and stabilize debt levels. Additionally, enhancing fiscal governance through credible medium-term frameworks, independent fiscal councils, and sound risk management is essential to ensure sustainable public finances and financial stability.

The projected rise in global public debt to nearly 100% of GDP by 2030 would surpass the previous peak of 98.9% observed in 2020 during the COVID-19 pandemic. In severe scenarios, the IMF warns that global debt could exceed 117% of GDP, a level not seen since World War II. This historical comparison underscores the magnitude of the current debt trajectory and the potential challenges it poses to global economic stability.

The IMF's latest projections serve as a stark reminder of the delicate balance between necessary government spending and fiscal sustainability. As global public debt approaches unprecedented levels, the imperative for strategic fiscal policies and international cooperation becomes increasingly critical to ensure economic stability and growth.