Washington: The International Monetary Fund (IMF) announced that global public debt is expected to surpass 100% of the world's gross domestic product (GDP) by 2029, reaching its highest level since 1948. The IMF highlighted this projection in its Fiscal Monitor October report, emphasizing the steep increase in global public debt since the coronavirus pandemic.

According to Anadolu Agency, the IMF stated that public debt might even reach 123% of GDP by 2029, with a 5% risk of this scenario occurring. The report noted that most major economies either already have or are on track to have public debt levels exceeding 100% of GDP. Although the number of countries with such high debt levels is expected to decrease gradually over the next five years, these nations are projected to increase their share of the global GDP.

Countries such as Canada, China, France, Italy, Japan, the UK, and the US are among the G20 nations where public debt exceeds 100% of GDP. The IMF pointed out that these countries typically have deep and liquid sovereign bond markets, which provide them with a moderate fiscal risk due to their broad policy choices.

In contrast, many emerging and low-income countries face greater fiscal challenges despite having relatively low debt levels. The IMF reported that while more than 100 countries had public debt below 60% of GDP in 2021-a trend expected to continue-their collective GDP represents less than 30% of the global total. The IMF also highlighted that 55 countries are either in a debt crisis or at significant risk, despite their debt ratios frequently being below 60% of GDP.

The IMF emphasized the importance of timely debt restructuring when countries struggle with debt to prevent further damage. Developing nations have limited options for funding and policy, making debt restructuring a critical tool in managing fiscal challenges.