The global public debt is expected to exceed 100% of gross domestic product by 2029reaching the highest levels since 1948 stated the International Monetary Fundby inviting countries to reinforce the their fiscal stocksin order to protect themselves from economic risks that are constantly increasing.

THE Vitor Gasparof the head of Department of Financial Affairs of the IMF said that global public debt levels could be ejected up to 123% of GDP by the end of the decade, in a “unfavorable but possible scenario” as it described it, just below the historical high of 132% recorded immediately after the World War II.

“From our own perspective, the most worrying situation would be the one where there would be financial turmoil“Gaspar said in an interview, citing a separate IMF report published on Tuesday and warns of a possible” naughty “correction of markets.

Such a development, he said, could trigger a vicious cycle of fiscal and financial crisis, similar to that during the European debt crisis launched in 2010.

Concerns for new US -China trade war

The IMF this week has slightly revised its forecast for global development in 2025, taking into account milder impacts from duties. However, he warned that a resurgence of the US -China trade war (which was escalated after data training) could significantly slow down world production.

Gaspar stressed that the extremely uncertain prospects make budgetary reforms more important than ever and that the IMF calls on both developed and developing economies to reduce their debt levels, deficits and create security stocks.

“With such significant risks on the horizon, it is vital to be prepared and preparation requires the creation of fiscal reserves that will allow the authorities to react to serious negative shocks in the event of a financial crisis“, He said.

Previous IMF studies They have shown that countries with a higher fiscal space were in better position to reduce employment losses and economic activity in the event of serious negative shocks combined with a financial crisis, Gaspar said.

In its latest Fiscal Monitor, the IMF noted that rich economies already have public debt more than 100% of GDP or are projected to exceed it, as United States, Canada, China, France, Italy, Japan and Britain.

The risk for these countries is considered low to moderate, as they have deep government bond markets and more policy margins, while many emerging markets and low -income markets have fewer resources and face higher borrowing costs, despite their relatively lower levels of debt.

Gaspar emphasized that the borrowing costs are now much higher than the period between the world financial crisis of 2008–2009 and the 2020 pandemic, while budgets are pressured by growing geopolitical tensions, natural disasters, subversive technologies and aging.

“Although we recognize that the fiscal equation is politically difficult to achieve, the time to prepare is now“, Gaspar wrote in the foreword to the report, noting that targeted public spending on education and infrastructure can boost GDP.

Greece’s economy – on the contrary – from good to best

On the contrary, primary surpluses and a steady reduction in public debt in Greece by 2030 provides the IMF in the same report.

The primary surplus is projected at 3.2% of GDP in 2025 and at 2.3% in 2026. If the interest on public debt service are taken into account, the revenue-volume balance is expected to be balanced (zero) this year and has a deficit of 0.8% this year.

Gross public debt is projected to decline from 154.8% of GDP last year, 146.7% this year and 141.9% in 2026, with the prospect of further receiving 130.2% in 2030.

Public revenue is expected to increase from 49.3% of GDP last year to 49.8% this year and 50% in 2026, then to 46.8% in 2030.

Public spending from 48% of GDP in 2024 are projected to increase to 49.8% this year and further to 50.8% in 2026, to reduce to 48.2% in 2030.

Investments in human capital can enhance growth

Just a percentage of GDP percentage from current expenditure to education or other investment in human capital could increase GDP by more than 3% by 2050 in developed economies, and almost twice the emerging and growing countries, according to the IMF.

In the United States, the ratio of public debt to GDP exceeded post-war high during the Covid-19 pandemic and is projected to exceed 140% of GDP by the end of the decade, Gaspar said.

He added that IMF officials would call on the US authorities to stabilize debt by reducing the budget deficit, in the forthcoming US economy assessment that begins next month.

US deficit reduction would help to balance the American economywould liberate resources for the private sector within the US and internationally, helping to reduce interest rates and improve financial conditions.

China’s public debt is also increasing rapidlyFrom 88.3% of GDP to expected 113% to 2029, according to the IMF, which also plans a regular evaluation of the Chinese economy next month.