IMF: Global Debt to Reach 100% of GDP by 2029
International Monetary Fund criticizes extension of financial support measures during covid pandemic, including Italy's superbonus
Despite budgetary constraints, global debt will continue to grow over the next 5 years, reaching nearly 100% of global gross domestic product by 2029. This conclusion was reached by analysts of the International Monetary Fund (IMF). In a just released report titled “Fiscal Monitor 2024” (download it in PDF format from Pluralia’s website here), the driving force behind the dizzying growth in global debt will be major economies like China, Italy, Great Britain, and the USA. The nations that “must act to correct the imbalance between expenditures and revenues.”
Some economies, including Italy and Japan, have announced new fiscal stimulus plans and spending initiatives, often based on “overly optimistic fiscal estimates.” According to the IMF report, fiscal tightening is expected to resume in 2024, albeit gradually, bringing the global deficit to 4.9% of GDP. Overall, fiscal tightening policies are expected to remain rather modest and limited in the medium term.
In this context, the report says, many countries, including Italy, will have to initiate “further budgetary efforts” over the next two years. “The probability that Italy will reach the primary deficit needed to stabilize its debt is less than 50 percent,” the report says.
Subsequently, IMF analysts wrote, Italy’s deficit would have to fall to 3% in 2026, then record a further decline to 2.9% in 2027, and rise again to 3% in 2028-2029. In terms of public debt, estimates for 2024 point to 139.2% of GDP in 2024, rising thereafter to 140.4%, 142.6%, and 143.1% between 2025 and 2027. Subsequently, Italy’s public debt should fluctuate between 144.7% and 144.9% of GDP between 2028 and 2029 (table below).
