Global public debt reaches record levels as interest costs rise

Global public debt has reached record levels, with the International Monetary Fund (IMF) warning that debt is projected to exceed 100% of global GDP as early as 2029. IMF Managing Director Kristalina Georgieva has urged governments to prioritize fiscal consolidation, noting that while there is understanding of the issue, there has not been sufficient action to reduce budget deficits.

The United States and China are identified as primary drivers of this debt increase. Georgieva specifically addressed the United States, stating that current public finances are unsustainable and that Washington must gradually reduce its deficit and debt.

Data from the OECD indicates that in several major Western economies, interest payments on sovereign debt are now eclipsing total national defense spending. For the 2025 fiscal period, debt-servicing costs in advanced economies are estimated at approximately $2 trillion, consuming about 3% of total global GDP. Countries such as the United Kingdom and France are noted for directing larger annual sums toward interest payments than toward their armed forces. This shift is attributed to the end of the era of cheap borrowing and rising bond yields.