The International Monetary Fund predicts that global public debt will reach $100 trillion by the end of the year.

• By 2024, the IMF predicts that global public debt will surpass $100 trillion.
• The substantial increase in debt levels can be attributed to the growing fiscal deficits of the U.S. and China.
• Sub-Saharan African countries with limited resources are facing challenges in increasing taxes while maintaining effective fiscal policies.

The public debt worldwide could be more dire than most think, according to the International Monetary Fund, which pointed out skyrocketing fiscal deficits in the U.S. and China.

The IMF predicts that global public debt will surpass $100 trillion by 2024 and will equal 100% of world GDP by the end of the decade, according to its annual Fiscal Monitor report.

The global public debt to GDP ratio would decrease by approximately 20% if the U.S. and China were excluded from the calculations of rising public debt levels, according to the IMF.

The IMF's director of fiscal affairs, Vitor Gaspar, stated that public debt may be more severe than it appears due to an optimism bias in governments' debt calculations, which often leads to underestimation.

The "fiscal policy trilemma" is a challenge faced by governments, who must balance the need to spend more for security and growth with opposition to higher taxation as public debt levels become unsustainable, according to the report. In sub-Saharan Africa, poor countries are under immense pressure to spend to alleviate poverty, but they face limitations in their tax capabilities and finance conditions.

High levels of debt can put a country's markets at risk of a sudden sell-off if investors perceive its fiscal health as poor. Even in advanced economies with higher debt tolerance, such as the U.S. and China, this uncertainty can lead to a spillover effect of higher borrowing costs to other economies.

The U.S. Treasury Department recently announced that the nation's budget deficit has reached $1.833 trillion, the highest level since the pandemic era. In recent years, the U.S. has faced several government shutdowns as politicians increasingly clash over government funding bills, fueling growing concerns about the country's fiscal health.