IMF Sees Global Public Debt Above 100 Percent of GDP by 2030 as Borrowing Costs Climb
Global public debt is expected to exceed 100 percent of world gross domestic product by 2030, a level last reached in the immediate aftermath of World War II, the International Monetary Fund said in a blog published on 14 October with its October Fiscal Monitor, titled Taxing Better to Boost Growth. The average 10-year government bond yield in the Group of Seven rose by more than 1 percentage point between February and September, to its highest in nearly two decades, the fund said.
Interest bills take a larger share
The effective average interest cost of government financing is projected to rise from 2.3 percent in 2021 to 3.7 percent by 2031, the blog said. US interest payments are projected to climb “from about 2.8 percent of GDP before the pandemic to 5.7 percent in 2031”, while in low-income countries interest payments today consume more than 15 percent of tax revenues. The fund said the global primary deficit “is about 3.3 percent of GDP in 2026” and that stabilising the debt ratio this year “would require cutting it down to around 2.6 percent”. That implies an adjustment of 0.7 percentage points of GDP this year, on our calculation.
IMF fiscal projections, percent
| Measure | Value |
|---|---|
| US interest payments to GDP, 2031 | 5.7 |
| Effective interest cost of government financing, 2031 | 3.7 |
| Global primary deficit to GDP, 2026 | 3.3 |
| Primary deficit that would stabilise debt, 2026 | 2.6 |
From the Fiscal Monitor blog of 14 October 2026.
Taxing better, and the Gulf’s buffers
The report’s analysis chapter argues that restoring the neutrality of value added tax, improving the tax treatment of investment costs, strengthening work incentives and targeting innovation support can raise growth while preserving revenue. Managing Director Kristalina Georgieva told the Global Policy Agenda press briefing on 14 October that Gulf authorities had pursued structural reforms and put their fiscal house in good order, citing Saudi Arabia’s introduction of value added tax and non-oil growth that had exceeded growth in the oil sector, and said those buffers were paying great dividends.
Why it matters: Higher yields in the advanced economies raise borrowing costs that can spill over to emerging markets, whose favourable financing window the fund said may not last, which makes fiscal buffers such as those built in the Gulf more valuable, on our reading.
Outlook: The fund holds its Middle East and Central Asia regional press briefing on 15 October and publishes the full Regional Economic Outlook on 22 October.
Sources: International Monetary Fund, The Edge.
