The nation’s $38 trillion debt presents a growing risk to the global economy, the experts have warned
US national debt will surge to 140% of GDP within five years, the International Monetary Fund (IMF) has warned, urging Washington to slash its fiscal deficit to rein in outsized trade and current account gaps.
The US national debt has swelled to more than $38 trillion, and the fiscal shortfall is deepening, data shows. It represents a $2.25 trillion increase over the past year, with debt projected to hit $39 trillion by April. The federal budget deficit rose from roughly $1.4 trillion in fiscal year 2022 to about $1.8 trillion last year, according to the IMF’s latest figures.
Speaking to reporters on Wednesday after the fund’s annual review of American economic policies, IMF chief Kristalina Georgieva said that “the current account deficit is too big, to make it very simple for the audience.” She said that the problem is recognized by the US administration.
Read more China calls on banks to limit exposure to US debt – BloombergThe IMF’s latest Article IV review projects US public debt will reach 140% of GDP by 2031 under current policies, while rising short‑term debt and a climbing debt‑to‑GDP ratio pose growing risks to both US and global stability. The fund said Washington needs a clear fiscal consolidation plan to put debt on a sustainable downward path.
It also urged the US to work constructively with its partners “to address concerns over unfair trade practices and agree on a coordinated reduction in trade restrictions and industrial policy distortions that have negative cross-border effects.”
“Where trade and investment measures (including tariffs and export controls) are put in place for national security reasons, such policies should be applied narrowly,” the IMF said.
US economic growth will remain resilient at 2.4% in 2026, while inflation will not return to the Federal Reserve’s 2% target until early 2027 amid uncertainty over the inflation and growth outlook, data shows.
The IMF’s report was drafted before the Supreme Court struck down many of US President Donald Trump’s tariffs and it said it would assess the ruling’s impact.
US public debt, issued to cover budget deficits and fund programs like healthcare, defense, and infrastructure, is widely seen as a safe global asset. Its interest rates set benchmarks for other markets and help attract foreign capital. But rising debt can push up borrowing costs and inflation, threatening economic stability at home and abroad.
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