The IMF projected on Wednesday that global public debt to increase by 2.8 percentage points this year - more than twice the estimates for 2024 - pushing debt levels above 95 percent of GDP, following the U.S.' announcements of tariffs.
These numbers are based on the World Economic Outlook reference projections, reflecting tariff announcements made between February 1 and April 4. Amid substantial policy uncertainty and a shifting economic landscape, debt levels could rise even further, the IMF warned in a blog post.
Citing the negative impact that the sweeping U.S. "reciprocal tariffs" affecting more than 180 countries and regions around the world have on global trade and economic growth, the IMF downgraded its global growth forecast from 3.3 percent to 2.8 percent for 2025 on Tuesday. Notably, the IMF cut its forecast for U.S. GDP growth from 2.7 percent in the January forecast to 1.8 percent in the latest forecast.
"Major policy shifts underway have heightened global uncertainty. The series of recent tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks," said the IMF blog post on Wednesday.
Debt risks were already elevated. According to the Fiscal Monitor's debt-at-risk, which utilizes data up to December 2024, in a severely adverse scenario global public debt could reach 117 percent of GDP by 2027. This would represent the highest level since World War II, exceeding reference projections by almost 20 percentage points, according to the IMF.
Surging debt level will also create troubles for economies, as policymakers will need to deal with complex trade-offs between debt, slower growth, and new spending pressures, the IMF said.
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