File Photo: An exterior view of the building of the International Monetary Fund (IMF), with the IMG logo in Washington, DC. AFP
Total global debt reached $251 trillion last year, the IMF said on Wednesday.
Government debt rose to $99.2 trillion while private sector liabilities fell to $151.8 trillion, pushing private debt down to under 143 percent of global GDP, its lowest level since 2015, while public debt rose to nearly 93 percent.
The Fund noted sharp disparities across countries and income groups.
The US and China remained the biggest drivers of global debt dynamics: US government debt rose to 121 percent of GDP from 119 percent, while China’s climbed to 88 percent from 82 percent.
Excluding the US, public debt in advanced economies fell to 110 percent of GDP, with declines in Japan, Greece, and Portugal offsetting increases in France and the UK. In emerging markets excluding China, public debt edged down below 56 percent.
Private debt trends diverged more sharply. US private debt fell by 4.5 percentage points to 143 percent of GDP, supported by strong household balance sheets, while China’s surged by six points to 206 percent, driven mainly by corporate borrowing despite persistent property sector weakness.
Borrowing rose in Brazil, India, and Mexico, but declined in Chile, Colombia, and Thailand.
The IMF attributed rising public debt largely to persistently high fiscal deficits, averaging around 5 percent of GDP, stemming from pandemic-era spending and higher interest costs. Subdued corporate borrowing in many advanced economies helped drive the fall in private debt.
The Fund urged governments to adopt “gradual but credible” fiscal adjustment plans to rein in public debt while fostering growth-friendly conditions to avoid crowding out private investment.
Egypt, meanwhile, is pressing ahead with what officials have called a new economic development narrative, a five-year roadmap aimed at cutting external debt by $1–2 billion annually despite regional turbulence, Prime Minister Mostafa Madbouly said on Tuesday.
Under its $8 billion Extended Fund Facility (EFF) loan programme with the IMF, Egypt is targeting a debt-to-GDP ratio below 70 percent by the 2028/2029 fiscal year.
In its latest World Economic Outlook, the IMF trimmed its forecast for Egypt’s real GDP growth in FY2025/2026 to 4.1 percent, down 0.2 percentage points, citing concerns over stalled structural reforms.
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