$102 Trillion Global Debt: The U.S. And China Lead The Charge – What You Need To Know

As the global debt approaches $102 trillion, the United States and China are the top contributors to the increasing debt. According to data from the IMF and Visual Capitalist, in one year, the global debt will have risen by $5 trillion.

The United States: A Growing Debt Mountain

The U.S. accounts for the largest portion of the global debt at 34.6%. Major contributing factors include an aging population, defense spending triggered by geopolitical tensions and rising health care costs. 

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Net interest payments on the national debt exceeded $892 billion in the 2024 fiscal year. The IMF projects that by 2034, annual interest payments in the U.S. will hit $1.7 trillion and cumulative interest costs over the next decade will reach upward of $12.9 trillion. 

The IMF wrote that these pressures require major fiscal adjustments – like spending cuts and increased taxes – to stabilize debt levels. They suggest that without intervention, the United States' debt burden could greatly strain government budgets and economic growth. 

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China: Accelerating Debt Growth

China is the second-largest contributor to global government debt at 16.1%. In 2024, China's debt-to-GDP ratio stood at 90.1%. Projections show that this number could reach 111.1% by 2029. Increases to China's debt are driven by ongoing stimulus measures to support its economy amid external pressures, like potential tariffs from the U.S. 

China has been able to mitigate some of its debt risks despite the challenges it faces. However, the IMF warns that current fiscal efforts may not be enough to stabilize or reduce debt levels in the future. 

Rising Risks and Global Implications

Global public debt is expected to exceed 100% of global GDP by 2029. Aging populations, rising health care costs and higher defense spending in major countries like the U.S., China, Brazil and France drive this growth. The IMF's October 2024 Fiscal Monitor also warns about "hidden debt" from state-owned enterprises and other liabilities, which could increase global public debt beyond current estimates.

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In the U.S., experts are raising concerns about the potential impact of high debt on the dollar. The Bipartisan Policy Center says rising debt could hurt the dollar's role as the world's main reserve currency. If investors lose confidence in the U.S.'s ability to manage its debt, it could weaken America's economic power globally.

Addressing the Debt Challenge

Experts say governments need to create policies that lower debt while still protecting the most vulnerable. The IMF recommends reforming entitlement programs, increasing taxes in wealthier countries and improving how taxes are collected in developing nations. These measures aim to reduce debt without significantly slowing economic growth.

As debt levels keep rising, governments face growing pressure to take action. Without real changes, the increasing debt could harm long-term economic stability worldwide.

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