(MENAFN) The International Monetary Fund (IMF) has projected that global public debt will exceed 100% of world gross domestic product (GDP) by 2029, reaching its highest level since 1948, according to reports.

“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 stated in its October Fiscal Monitor report.

The fund also highlighted that with a 5% probability, global public debt could rise to 123% of GDP by 2029. For most major economies, public debt already surpasses or is on course to surpass 100% of GDP.

While the number of countries with debt above this threshold is expected to decline gradually over the next five years, these nations are projected to account for an increasing share of global GDP. Among the G20 nations, Canada, China, France, Italy, Japan, the UK, and the US have public debt exceeding 100% of GDP. “These countries typically have deep and liquid sovereign bond markets and often broad policy choices, resulting in their fiscal risk considered moderate,” the IMF noted.

In contrast, many emerging markets and low-income nations face more severe fiscal constraints despite having relatively low debt levels. “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%,” the report stated.

The IMF emphasized that developing countries have limited fiscal and funding options. Even with debt ratios often below 60% of GDP, 55 countries are either in a debt crisis or at high risk. “When countries falter on debt, timely debt restructuring is critical to containing the damage,” it added.

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