Imf Warns Global Public Debt Approaching Wwii Levels As Era Of Cheap Borrowing Ends

The IMF published new data showing global public debt hit 93.9% of GDP in 2025 and is on track to breach 100% by 2028, a level not seen outside of World War II. Borrowing costs have doubled or tripled in a short span, with US net interest payments climbing from 2% of GDP pre-pandemic to 4.2% in 2025, surpassing defense spending.

IMF Fiscal Affairs officials Era Dabla-Norris and Rodrigo Valdes wrote that governments can no longer defer hard fiscal choices by borrowing on easy terms. In low-income countries, interest payments now consume 21% of tax revenues on average.

The article warns that persistent deficits are shifting national income toward creditors at the expense of public goods, and that the next generation risks being handed the bill. Only 42% of survey respondents understood that raising taxes or cutting spending would reduce a deficit, highlighting a public trust gap the IMF says is central to any reform path.