(MENAFN) The International Monetary Fund (IMF) issued a stark warning Wednesday, projecting that worldwide public debt will surpass 100% of global gross domestic product (GDP) by 2029, reaching levels unseen since 1948.

“This reflects a higher and steeper path than projected before the (coronavirus) pandemic. In addition, the distribution of risks is wide and tilted toward debt accumulating even faster,” the IMF emphasized in its October Fiscal Monitor report.

The report also flagged a 5% risk scenario where public debt could climb to 123% of GDP within the next decade.

Among major economies, the IMF revealed that public debt already exceeds or is on track to exceed 100% of GDP. While the number of countries with debt over this threshold is expected to decline over the next five years, those nations will represent a growing portion of global GDP.

Canada, China, France, Italy, Japan, the UK, and the US—key G20 members—all have public debt surpassing 100% of GDP. The IMF noted, “These countries typically have deep and liquid sovereign bond markets and often broad policy choices, resulting in their fiscal risk considered moderate.”

Conversely, emerging and low-income countries face harsher fiscal constraints despite lower debt levels. The IMF highlighted that, “The number of countries with public debt below 60% of GDP increased to more than 100 in 2021 and is projected to continue to increase, although their GDP share in the world represents less than 30%.”

These developing nations often lack viable funding options and policy flexibility. Even with debt ratios frequently under 60%, 55 countries are currently experiencing a debt crisis or are at significant risk.

“When countries falter on debt, timely debt restructuring is critical to containing the damage,” the IMF concluded.

This report underscores escalating global debt vulnerabilities, signaling urgent attention for both advanced and developing economies.

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