Key points
- IMF says total global debt remains above 235% of GDP in 2024
- Public borrowing rose to nearly 93% while private debt declined
- Japan, Sudan, Singapore among the world’s most indebted nations
- Pakistan at 77%, breaching its 60% FRDLA cap but far below extreme cases
ISLAMABAD: Global debt remained above 235% of global GDP in 2024, according to the International Monetary Fund’s Global Debt Database (GDD), underscoring the delicate balance governments face between fiscal support and sustainability.
The IMF mentioned falling private sector liabilities — especially household debt — were offset by a sharp rise in public borrowing, leaving the world’s overall debt ratio little changed. Private debt dipped to below 143% of global GDP, the lowest since 2015, while public debt rose to nearly 93%.
What is GDD and why does it matter?
The IMF’s Global Debt Database (GDD) is the world’s most comprehensive dataset on public and private debt, tracking 190 countries since the 1950s. It matters because it helps policymakers and investors assess vulnerabilities and risks in the global financial system.
Advanced Economies Drive Global Totals
Advanced economies accounted for a significant portion of the increase, with debt levels in Japan, the United States, and Europe among the highest.
Japan’s public debt stands at roughly 250% of GDP, the world’s largest, though most is held domestically. The United States’ debt is over 120%, raising concerns about fiscal deficits and interest costs.
Emerging markets show mixed trends. Countries like Greece (142%), Bahrain (141%), and the Maldives (141%) remain heavily indebted, leaving them exposed to market shifts. Smaller developing economies with narrow revenue bases, such as Sudan, face even more acute risks.
Top Ten Most Indebted Countries
The IMF data rank the following as the highest in terms of government debt-to-GDP:
Sudan (252%)
Japan (250%)
Singapore (175%)
Greece (142%)
Bahrain (141%)
Maldives (141%)
Italy (135–140%)
United States (123%)
France (110–116%)
Canada (112–113%)
Pakistan in a “Safe but Strained” Range
Pakistan’s government debt stands at about 77% of GDP, above the 60% ceiling set in the Fiscal Responsibility and Debt Limitation Act (FRDLA). The ratio places Pakistan in a moderate-risk category — well below the extreme levels of the top ten but still in breach of its own legal benchmark.
Economists caution that Pakistan’s challenge is less the overall size of debt and more its composition. With a significant share owed externally and rising interest payments consuming a large part of revenues, fiscal space is limited.
“Pakistan’s debt trajectory reflects persistent deficits and weak revenue mobilisation. While not at Japan or Greece levels, breaching the 60% FRDLA threshold erodes credibility and investor confidence,” an IMF analyst noted in a recent briefing.
Regional Breakdown – South Asia
In South Asia, debt levels vary widely, reflecting stark differences in fiscal strength and borrowing capacity. Sri Lanka remains one of the region’s most distressed economies, with public debt exceeding 120% of GDP in the aftermath of its 2022 default. India’s debt stands near 82%, reflecting continued high borrowing requirements. Pakistan, at 77%, sits below India but remains above its legal cap. Bangladesh maintains a relatively low ratio of around 40%, supported by more disciplined borrowing, while Nepal’s public debt hovers near 45%.
The IMF cautioned that while Bangladesh and Nepal are better positioned, both remain vulnerable to external financing shocks. For India and Pakistan, the key challenge lies in high interest payments relative to revenues, while Sri Lanka’s debt crisis underscores the dangers of prolonged fiscal imbalances.
Why Global Debt Matters
The IMF warned that high debt ratios leave countries more vulnerable to shocks — from rising interest rates to slower growth and geopolitical risks. Advanced economies may rely on strong financial systems to manage debt, but emerging and low-income countries risk being shut out of capital markets or facing default pressures.
The Fund urged governments to restore fiscal buffers, improve tax collection, and pursue reforms that anchor debt sustainability. Without credible strategies, it said, high global debt could “constrain growth, undermine financial stability, and heighten risks for both advanced and emerging economies.”
