Public debt levels seen to reach 100% of GDP by 2029: IMF

Global public debt is projected to rise above 100% of gross domestic product (GDP) by 2029, reaching its highest level since 1948 and continuing to climb, the IMF said on Wednesday, urging countries to build up buffers to guard against economic risks.

Vitor Gaspar, head of the International Monetary Fund's fiscal affairs department, said global public debt levels could soar as high as 123% of GDP by the end of the decade under an "adverse but plausible scenario," just under the all-time high of 132% reached just after World War Two.

"From our viewpoint, the most concerning situation would be one in which there would be financial turmoil," he said in an interview, citing a separate IMF report released on Tuesday that warned of a possible "disorderly" market correction, as reported by Reuters.

Allocating just one percentage point of GDP from current spending to education or other human capital investment could boost GDP by more than 3% by 2050 in advanced economies, and almost twice as much in emerging market and developing economies, the IMF said.

The IMF noted that rich economies had public debt levels already greater than 100% of GDP, or projected to surpass that level, including the US, Canada, China, France, Italy, Japan, and UK.

In contrast, emerging markets and low-income countries face higher borrowing costs despite lower debt-to-GDP ratios, making them more vulnerable.