The global national debt is rapidly increasing and is soon expected to exceed $100 trillion – that’s nearly 93% of the total global GDP, and by 2030, it could reach 100%. This alarming forecast was published by representatives of the IMF.

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The rise in debt has accelerated since the coronavirus pandemic. Currently, the debt level is 10% of GDP higher than it was in 2019. This is due to high expenditures, uncertainty regarding debts, and overly optimistic forecasts.

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Why is debt increasing?

Countries are compelled to spend more on areas such as healthcare, an aging population, green energy, and climate adaptation. Additionally, we cannot overlook the geopolitical tensions that force nations to increase their defense and security spending.

The IMF suggests various solutions tailored for different countries. Developed economies can reconsider social benefits, adjust budget spending priorities, and raise taxes where feasible. Meanwhile, developing markets should expand their tax base and improve tax administration. It is also crucial to maintain investments in long-term projects and protect socially vulnerable groups.

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However, the pace of these changes also matters. If measures are implemented gradually and consistently, it will help mitigate risks without delivering a severe blow to the economy and social justice. Countries at high risk of a debt crisis will need to act even more quickly and decisively.