Markets

Animated: Global Debt Projections (2005-2027P)

Published

9 months ago

August 1, 2023

Dorothy Neufeld

Graphics/Design:

Athul Alexander

Animated Chart: Global Debt Projections

Total global debt stands at nearly $305 trillion as of the first quarter of 2023.

Over the next five years, it is projected to jump even further—raising concerns about government leverage in a high interest rate and slower growth environment.

As global debt continues to climb, this animated graphic shows data and projections for public debt-to-GDP ratios using the World Economic Outlook (April 2023 update) from the IMF.

Growing Global Debt Projections

After rising steadily for years, government debt first ballooned to almost 100% of GDP in 2020. While this ratio has fallen amid an economic rebound and high inflation in 2021 and 2022, it is projected to regain ground and continue climbing.

World government debt is now projected to rise to 99.5% of GDP by 2027. Here’s data going back to 2005, as well as the forecast for global public debt-to-GDP:

Year	🇺🇸 U.S.	🇨🇳 China	🌎 Global Average
2027P	134.0%	105.9%	99.5%
2026P	131.8%	101.0%	98.2%
2025P	129.2%	95.7%	96.8%
2024P	125.9%	90.1%	95.1%
2023P	122.2%	84.4%	93.6%
2022	121.7%	77.5%	92.3%
2021	126.4%	72.3%	95.7%
2020	133.5%	70.1%	99.8%
2019	108.7%	60.4%	84.2%
2018	107.4%	56.7%	82.8%
2017	106.2%	55.0%	82.6%
2016	107.2%	50.7%	83.8%
2015	105.1%	41.5%	79.9%
2014	104.5%	40.0%	78.6%
2013	104.5%	37.0%	78.3%
2012	103.0%	34.4%	79.7%
2011	99.5%	33.8%	77.9%
2010	95.1%	33.9%	76.9%
2009	86.6%	34.6%	74.7%
2008	73.4%	27.2%	64.3%
2007	64.6%	29.2%	61.3%
2006	64.2%	25.6%	64.3%
2005	65.4%	26.3%	68.1%

Debt sharply increased in both 2020 and 2009 in conjunction with economic downturns. Historically, debt levels compared to GDP tend to increase as little as 4% and much as 15% in the five years after a global recession has ended.

In the U.S., public debt-to-GDP is set to reach a record 134% by 2027. The sharp rise in interest rates is increasing net debt servicing costs, which stood at $475 billion last year. Over the next 10 years, net interest costs on U.S. debt are projected to total $10.6 trillion.

China’s debt has also risen rapidly, and is projected to eclipse 100% by 2026. Public debt as a percentage of GDP is forecast to jump fourfold between 2005 and 2027. This year alone, new government debt issuance is projected to hit record levels. A large portion of this debt consists of infrastructure bonds that are focused on boosting the economy.

Comparing Trends Across Global Economies

Below, we show how the public debt-to-GDP ratios for advanced economies compare with emerging markets and low-income countries. Both the U.S. and China are excluded here:

Year	Advanced Economies	Emerging Markets	Low-Income Countries
2027P	103.8%	57.2%	43.8%
2026P	104.1%	56.9%	44.5%
2025P	104.4%	56.6%	45.3%
2024P	104.5%	56.1%	46.3%
2023P	105.2%	55.7%	47.6%
2022	105.5%	55.2%	47.9%
2021	111.3%	58.6%	47.9%
2020	115.8%	61.4%	48.0%
2019	100.8%	51.6%	42.6%
2018	100.0%	49.8%	41.5%
2017	101.7%	49.1%	41.2%
2016	104.9%	48.3%	38.6%
2015	102.3%	45.2%	35.1%
2014	103.4%	39.9%	31.2%
2013	104.0%	38.4%	30.9%
2012	107.1%	38.0%	29.9%
2011	102.2%	38.3%	29.9%
2010	98.4%	39.6%	28.4%
2009	93.1%	41.1%	29.9%
2008	79.9%	36.4%	27.5%
2007	74.7%	38.4%	29.4%
2006	78.8%	41.0%	33.0%
2005	82.2%	45.9%	42.0%

In a retreat from 2020 highs, public debt is projected to fall meaningfully compared to GDP by 2027 for advanced economies excluding America. Emerging markets are also projected to see this leverage ratio decline.

Low-income countries have smaller debt levels compared to output, which is expected to continue over the next five years. Despite this, 39 of these countries are in debt distress—or are close to it—as high interest rates add pressure to government balance sheets.

Are High Global Debt Levels Sustainable?

The good news is that 60% of economies are forecast to see their public debt-to-GDP ratios fall below COVID-19 peaks by 2027.

On the other hand, many large advanced and emerging economies, including China, Brazil, Japan, and Türkiye are projected to face steeper debt. In the U.S., payments on public debt have soared to record levels due to rising interest rates.

This comes as aging populations, slower economic growth, and healthcare costs are straining government spending, a trend seen across many advanced economies.

Countries with economic growth rising faster than real interest rates may be more likely to sustain high debt levels. But sticky inflation, prompting higher interest rates, will likely make these debt piles even more fragile.

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Markets

Visualizing Global Inflation Forecasts (2024-2026)

Here are IMF forecasts for global inflation rates up to 2026, highlighting a slow descent of price pressures amid resilient global growth.

Published

6 hours ago

May 3, 2024

Niccolo Conte

This line chart shows IMF projections for global inflation rates through to 2026.

Visualizing Global Inflation Forecasts (2024-2026)

Global inflation rates are gradually descending, but progress has been slow.

Today, the big question is if inflation will decline far enough to trigger easing monetary policy. So far, the Federal Reserve has held rates for nine months amid stronger than expected core inflation, which excludes volatile energy and food prices.

Yet looking further ahead, inflation forecasts from the International Monetary Fund (IMF) suggest that inflation will decline as price pressures ease, but the path of disinflation is not without its unknown risks.

This graphic shows global inflation forecasts, based on data from the April 2024 IMF World Economic Outlook.

Get the Key Insights of the IMF’s World Economic Outlook

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The IMF’s Inflation Outlook

Below, we show the IMF’s latest projections for global inflation rates through to 2026:

Year	Global Inflation Rate (%)	Advanced Economies Inflation Rate (%)	Emerging Market and Developing Economies Inflation Rate (%)
2019	3.5	1.4	5.1
2020	3.2	0.7	5.2
2021	4.7	3.1	5.9
2022	8.7	7.3	9.8
2023	6.8	4.6	8.3
2024	5.9	2.6	8.3
2025	4.5	2.0	6.2
2026	3.7	2.0	4.9

After hitting a peak of 8.7% in 2022, global inflation is projected to fall to 5.9% in 2024, reflecting promising inflation trends amid resilient global growth.

While inflation has largely declined due to falling energy and goods prices, persistently high services inflation poses challenges to mitigating price pressures. In addition, the IMF highlights the potential risk of an escalating conflict in the Middle East, which could lead to energy price shocks and higher shipping costs.

These developments could negatively affect inflation scenarios and prompt central banks to adopt tighter monetary policies. Overall, by 2026, global inflation is anticipated to decline to 3.7%—still notably above the 2% target set by several major economies.

Adding to this, we can see divergences in the path of inflation between advanced and emerging economies. While affluent nations are forecast to see inflation edge closer to the 2% target by 2026, emerging economies are projected to have inflation rates reach 4.9%—falling closer to their pre-pandemic averages.