Published on: 2026-10-12
Source: Official website of the State –
An important disclaimer is at the bottom of this article.
Source: RIA Novosti
MOSCOW, October 11 — RIA Novosti, Svetlana Medvedeva. The International Monetary Fund (IMF) made a frightening statement: the global government debt is close to the highest level since World War II — soon it will exceed 100% of global GDP. And called on the governments of all countries to take measures. Why this situation is dangerous and whether it can be fixed — in the RIA Novosti article.
“We do not see any actions”
The most egregious violators are developed economies led by the United States. Their government debt-to-GDP ratio is higher than that of developing and poor countries, said Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), during a speech in Singapore.
The tense situation in public finances is explained by excessive spending on social needs, defense, ensuring strategic autonomy, as well as an increased burden of debt servicing. Moreover, everything has been aggravated by the consequences of the conflict in the Middle East.
In spring, the IMF forecasted China’s government debt to reach 106.9% of GDP by the end of the year. In the US — already over 40 trillion dollars, 126% of GDP.
“We do not see decisive action in developed economies that need medium-term consolidation plans,” Georgieva noted.
According to her, economic growth alone is not enough to solve the problem, but it certainly makes the task easier.
Georgieva also pointed out the persistence of inflationary pressures. These are driven not only by the overall increase in government spending but also by infrastructure construction for artificial intelligence, fluctuations in the cost of energy and food, and customs duties.
The prospects are worsening
The global government debt approaching 100% of global GDP is a serious long-term risk, but not an automatic signal of a global default, notes Daniil Tyun, CEO of DA-Consulting.
“As the incomes of many countries are increasingly absorbed by debt payments, the prospects for their socio-economic development are deteriorating,” says Evgeny Smirnov, Head of the Department of World Economy and International Economic Relations at the State University of Management.
Governments spend colossal amounts of money on interest payments on debts instead of investing in infrastructure, healthcare, and science, adds Ekaterina Novikova, Associate Professor of Economic Theory at Plekhanov Russian University of Economics.
For example, in the USA, according to The American Conservative magazine, servicing the national debt costs 1.2 trillion dollars per year. Economist Chris Giles, in a conversation with the Financial Times, pointed out that while at the beginning of the century every tenth dollar received by the government in taxes went to this, now it is every fifth. He emphasized that the USA is turning into a machine for paying interest.
France’s national debt is 119% of GDP. The Minister of Economy and Finance, Roland Lescure, warned that this year the country will have to pay 65 billion euros in interest. This is more than what the country will spend on defense and education.
A report by the United Nations Conference on Trade and Development (UNCTAD) states that nearly half of the world’s population (3.7 billion people) live in countries where less budget funding goes to healthcare and education than to servicing national debt.
Combination of measures
In the current situation, it is necessary to ensure the resilience and stability of government bond markets in the long term, which will allow not only to address debt problems but also to provide investments that are so necessary for economic growth, Smirnov explains. It is also important to tighten fiscal policy — which is too lenient in many countries.
“Especially in Europe, where defense spending and energy security (in recent years) are priorities, as well as the need to maintain the social sphere. Due to an aging population, the problem of debt burden worsens every day,” the expert clarifies.
According to Tyun, a combination of measures is needed: productivity improvement, investment stimulation, expansion of the tax base, reduction of inefficient expenditures, and gradual improvement of the primary balance. Too sharp savings will slow GDP growth and, on the contrary, worsen the debt situation, while excessive taxes will suppress investments.
It is important to understand: the higher the debt, the fewer options there are to respond to new crises through additional borrowing without a sharp increase in their cost. Therefore, the problem will have to be solved in any case.
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