London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Global governments debt has risen to 98% of economic output, a level last seen after World War II, IMF Says

Global governments debt has risen to 98% of economic output, a level last seen after World War II, IMF Says

Government debt around the world shot up last year to approach levels last seen in the aftermath of World War II, the International Monetary Fund said Thursday.
Public debt as a share of global gross domestic product surged to 98% by the end of December from 84% at the end of 2019, before the pandemic struck, the IMF said in an update to its semiannual Fiscal Monitor report. The IMF is the global lender of last resort to countries in distress and tracks debt levels closely. The total dollar value of global debt, which includes central and state government debt, came to $89.6 trillion at year’s end.

The increase was particularly large among advanced economies, which can easily borrow at low interest rates. The debt-to-GDP ratio among those nations rose to 123% by December from 105% in 2019, and it is expected to grow to 125% this year.

“From 2021 onwards, debt stabilizes at a high level and stays elevated well above the pre-Covid-19 level up to the end of” 2021, said Vitor Gaspar, director of the IMF’s Fiscal Affairs Department.

The IMF said governments should emphasize measures to combat the pandemic and cautioned against prematurely dialing back on spending.

“The virus won’t be under control anywhere until it is under control everywhere,” Mr. Gaspar said. “The sooner that happens, the sooner economic activity will pick up and the sooner jobs will come back. That is the high road to growth and fiscal sustainability.”

In the U.S., the debt-to-GDP ratio hit an estimated 129% in 2020 and is projected to rise to 133% this year, up from 108% in 2019, the IMF said. The projection takes into account two major pandemic-related stimulus bills adopted in 2020—the $2.2 trillion Cares Act in March and the $900 billion package in December.

The IMF defines public-sector debt to include debt held by central banks. The U.S. tracks debt held by the public, which came to about 100% of GDP at the end of September 2020.

President Biden’s $1.9 trillion stimulus plan, if enacted as proposed, would boost the U.S. economy by roughly 5% over three years, IMF chief economist Gita Gopinath said earlier. The IMF projects the U.S. economy will grow by 5.1% this year after shrinking an estimated 3.4% in 2020.

“The U.S. has a very large capacity to act. That is not something widely shared across the world,” Mr. Gaspar said.

While wealthy nations will continue to spend aggressively this year, emerging-market countries, facing higher borrowing costs, will start cutting back, the IMF projects. Among the poorest nations, spending was flat in 2020, as governments increased outlays on health care but cut back in other areas.

Bolstering governments’ ability to spend, particularly in advanced economics, are historically low interest rates and inflation in recent years, which have kept borrowing costs low. Since the 1990s, the amount of public debt in advanced economies has more than doubled relative to GDP. At the same time, interest costs have declined by half, Mr. Gaspar said.


Still, IMF economists called on governments to stay vigilant about their fiscal health and be wary of the risk that heavy deficit spending could set off runaway inflation. A study by IMF economist Paolo Mauro showed that when interest rates start rising, they go up fast and do so late before a run-up to a fiscal crisis.

Once the virus is brought under control, IMF economists say, governments should focus their spending on moving their economies to a “smart, green inclusive and resilient model of growth,” Mr. Gaspar said.
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×