IMF chief says global debt nears 100% of GDP, topping WWII-era highs

International Monetary Fund Managing Director Kristalina Georgieva told finance ministers gathered in Asheville, North Carolina, that global public debt has climbed to nearly 100 percent of GDP, surpassing levels last seen after World War II, and warned the trajectory points further upward.etnownews

Georgieva delivered her remarks at the conclusion of the G20 Finance Ministers and Central Bank Governors Meeting, which convened on August 31 and September 1 at the Omni Grove Park Inn. The meeting, hosted by Treasury Secretary Scott Bessent as part of the United States' 2026 G20 presidency, brought together senior economic officials from the world's largest economies.treasury+2

A Debt Staircase With No Way Down

Georgieva described the evolution of global debt as resembling "a staircase: big vertical steps when shocks occur, little or no reduction afterward". The IMF's April 2026 Fiscal Monitor had already projected that global public debt, which stood at just under 94 percent of GDP in 2025, would reach 100 percent by 2029 — one year earlier than previously forecast.aa+2

The IMF chief identified several converging risks: continued disruption from the closure of the Strait of Hormuz, stalled disinflation across many countries, and uncertainty about artificial intelligence's effects on productivity and financial stability. Rising energy demand from AI data centers, combined with the approaching Northern Hemisphere winter, could add further pressure to energy markets, she said.etnownews

Low-Income Countries Squeezed

Georgieva warned that higher bond yields in advanced economies are transmitting upward pressure across global yield curves, offsetting improvements in sovereign risk spreads for emerging markets. For low-income countries, elevated refinancing costs are limiting spending on infrastructure, healthcare, and education — undermining the growth needed to sustain debt repayment.etnownews

A sharp decline in net external financing, including cuts to official development assistance, has compounded the strain. The U.S. Treasury, for its part, emphasized the urgency of faster and more transparent debt restructurings, noting that Senegal had agreed to pursue restructuring under the G20 Common Framework.irishsun+1

Calls for Coordinated Action

Georgieva outlined three priorities: central banks should maintain their focus on price stability, fiscal authorities must produce credible medium-term consolidation plans, and governments should pursue structural reforms to remove barriers to growth. She also flagged that excess global imbalances widened by 0.7 percent of GDP in 2025, the largest increase in a decade, with the world's two largest economies among the leading contributors.etnownews

"Simultaneous, mutually reinforcing, policies across major economies would yield the best outcomes, including for growth," Georgieva said.etnownews