IMF: Global government debt to exceed $100 trillion in 2024

The global government debt is projected to exceed $100 trillion by the end of 2024, according to the International Monetary Fund (IMF). 

In its report, the IMF noted that while approximately two-thirds of countries are expected to stabilize or reduce their debt levels, they will still remain significantly higher than pre-pandemic forecasts, Caliber.Az reports.

This year, government debt is estimated to account for 93% of the world's GDP and could approach 100% by 2030, the report says.

The report highlights that the "at-risk" debt in economically developed countries has slightly decreased over the past three years, standing at 134% of GDP. In contrast, debt levels in emerging markets and developing countries have increased to 88% of GDP.

The IMF attributed the differences within and between groups of countries to initially higher debt levels in developed economies and significant primary deficits in systemically important nations, such as the People's Republic of China and the United States, as follows from the IMF report.

Furthermore, under an extremely adverse scenario, global debt could surpass the baseline forecast by nearly 20 percentage points of GDP over the next three years, potentially reaching 115% of GDP. This may be due to a number of reasons: slower economic growth, tighter financing conditions, deviations from budget targets, and increased economic and political uncertainty. Importantly, countries are becoming increasingly vulnerable to global factors affecting their borrowing costs, including the secondary effects of increased policy uncertainty in systemically important countries such as the United States. 

The large amount of unidentified debt is another reason why public debt may be much higher than projected. An analysis of more than 30 countries shows that 40 per cent of unidentified debt is related to contingent liabilities and fiscal risks facing the government, most of which are due to losses of state-owned enterprises. Time has shown that there is a significant amount of unidentified debt - on average between 1 and 1.5 per cent of GDP - and it increases sharply during periods of financial stress. 

By Khagan Isayev