Global debt will exceed 100% of global GDP by 2030, with the United States and China leading the way.

Global debt will exceed 100% of global GDP by 2030, with the United States and China leading the way.

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The latest estimates issued by the International Monetary Fund indicate that the pressures exerted by the world’s two major economies will lead to an increase in global debt. The numbers in the United States will accumulate more than 120% this year, while debts in China may reach triple digits in 2027. In Latin America, the general picture is similar, with the powers in the region contributing the largest numbers of debts.

By 2030, global debt will exceed 100% of global GDP, according to estimates from the International Monetary Fund, an entity that reported from the Moroccan capital, at its annual meeting with the World Bank.

“Global debt is expected to rise by 1 percentage point of GDP each year over the medium term. At the projected rate, global debt will reach 100% of GDP by the end of the decade.”

For the international lender, the increase is due to slower growth in economies around the world, rising interest rates and ever-widening fiscal deficits.

But to this panoramic scene are also added the pressures exerted by the major economies in the world, led by the United States and China.

International Monetary Fund forecasts © France 24 Spanish

In the new forecast, the US superpower’s debt will rise to 123.3% of its GDP this year, and is then expected to continue rising to 137% in 2028.

China, the second-largest economy, is also a major contributor to global red ink. Its debt is expected to reach 83% of GDP in 2023, and to continue growing until it exceeds 100% in 2027.

Panorama in Latin America

For the region, the IMF expects a jump from 3.4% to 4.6% of GDP this year in the regional budget deficit.

On the public debt side, it is expected to remain relatively stable at 68.5% of GDP with Argentina and Brazil rising compared to last year, and with Mexico, which is already in a better position than its regional neighbours, reducing.

IMF forecasts for Latin America
IMF forecasts for Latin America © France 24 Spanish

The larger the deficit, which is generated when expenditures are higher than income, the greater the debt owed by each country, which in turn means that each country allocates a larger proportion of its income to cover these obligations, sacrificing social investment or having to do so. Raise your taxes.

With AP and EFE

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