Rising Global Debt Requires Countries to Put their Fiscal House in Order

April 23, 2025--Amid heightened uncertainty, policymakers will need to deal with complex trade-offs between debt, slower growth, and new spending pressures
Major policy shifts underway have heightened global uncertainty. The series of recent tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks.

They come in the context of rising debt levels in many countries and already strained public finances, which in many cases will also need to accommodate new and permanent increases in spending, such as defense. Rising yields in major economies and widening spreads in emerging markets further complicate the fiscal landscape.

We project global public debt to increase by 2.8 percentage points this year-more than twice the estimates for 2024-pushing debt levels above 95 percent of gross domestic product. This upward trend is likely to continue, with public debt nearing 100 percent of GDP by the end of the decade, surpassing pandemic levels.