The International Monetary Fund (IMF) expects global public debt to exceed $100 trillion in 2024, according to the World Economic Outlook report released in October, Here are top most indebted countries.
Rising Global Debt Levels
Debt levels are expected to rise faster than previously anticipated, as government policies fail to address debt risks amid aging populations and rising healthcare costs. Increasing geopolitical tensions may also lead to higher defense spending, adding pressure to government budgets.
IMF Warnings
The IMF warned that the state of global public debt may be more dangerous than most people think, highlighting the high fiscal deficits in the United States and China.
Global Debt Projections by 2030
By the end of the decade, the IMF expects global public debt to reach 100% of global GDP by 2030.
America and China: The Most Indebted Countries
- United States: Its debt represents 34.6% of global government debt, totaling $36.1 trillion.
- China: Ranked second globally, with total debt reaching $16.4 trillion, representing 16.1% of global government debt.
Most Indebted Arab Countries
- Egypt: Tops the list of the most indebted Arab countries with $345.5 billion.
- Saudi Arabia: Follows with total debt of $311.5 billion.
Why Do Governments and Countries Borrow?
Governments derive most of their income from taxes, but if they cannot cover their spending, they resort to increasing taxes, cutting spending, or borrowing. Governments often decide to borrow to boost the economy and fund major projects such as infrastructure and healthcare.
How Do Governments Borrow?
- Selling Bonds: Governments raise funds by selling bonds to investors.
- IMF Loans: The IMF lends money to member countries to help them overcome economic crises.
- World Bank Loans: The World Bank lends to developing countries and private institutions.
- Domestic Borrowing: Governments borrow from national and local banks.
Risks and Impacts of Debt
- High Cost of External Debt: Developing countries face increasing costs of servicing external debt.
- Rising Borrowing Costs: Developing countries borrow at much higher interest rates.
- Resource Drain: Developing countries have seen net resource outflows.
- Impact on Health and Education: Interest payments constrain spending on development programs.
Top 5 Most Indebted Countries in 2024
- United States: $36.1 trillion.
- China: $16.5 trillion.
- Japan: $10.2 trillion.
- United Kingdom: $3.7 trillion.
- France: $3.6 trillion.
Top 5 Most Indebted Arab Countries in 2024
- Egypt: $345.5 billion.
- Saudi Arabia: $311.5 billion.
- UAE: $171.1 billion.
- Iraq: $121.2 billion.
- Algeria: $118.9 billion.