Saudi Press

Saudi Arabia and the world
Friday, Aug 22, 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

Saudi Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×