(MENAFN) Global public debt is on track to exceed the total size of the world economy within the next five years, IMF Managing Director Kristalina Georgieva cautioned, describing the trend as a “sobering reality” for policymakers worldwide.

Public debt encompasses the total borrowings of governments, businesses, and households. Georgieva noted that the current surge in debt is fueled by fiscal deficits, lingering effects of the pandemic, and rising interest costs in both developed and emerging markets.

“Global public debt is projected to exceed 100% of GDP by 2029,” Georgieva said in a speech broadcast on the IMF’s official YouTube channel. She warned that escalating debt could increase interest obligations, drive up borrowing costs, limit government spending, and reduce the ability of nations to respond to economic shocks.

The warning comes amid record-high US federal debt, with Washington running persistent deficits despite elevated interest rates. As of October, US debt has reached $37 trillion, approximately 125% of GDP, with interest payments now surpassing defense expenditures as one of the government’s largest costs.

The administration of former President Donald Trump defended the borrowing as essential for growth and domestic programs, though critics have raised concerns about potential fiscal strain. The IMF has previously warned that unchecked spending could raise global borrowing costs and destabilize emerging markets.

Georgieva also highlighted broader economic concerns, noting that the global economy is performing “worse than we need” and that ongoing shifts in geopolitics, technology, and demographics have made uncertainty “the new normal.”

“Global resilience has not yet been fully tested. And there are worrying signs the test may come,” Georgieva said, citing rising gold prices—which reached a record $4,000 per ounce—and soaring US stock valuations reminiscent of the dotcom bubble 25 years ago. She additionally cautioned that the full impact of Trump-era tariffs “is still to unfold.”

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