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, Visual Capitalist's Dorothy Neufeld presents 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.
