What is government debt?
Nations, too, borrow from the future.
Governments raise money through borrowing as well as taxes, and that debt is now approaching the size of the world economy. Why a nation’s debt reaches into our own lives.
In 30 seconds
- When taxes fall short, governments borrow, for example by issuing government bonds.
- According to the IMF, world government debt reached just under 94% of GDP in 2025 and is set to reach 100% by 2029.
- As debt grows, so do interest payments, which can leave less for other spending.
What taxes do not cover.
Governments raise money through borrowing too.
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How governments borrow
When a government spends more than it collects in taxes, it borrows, for example by issuing government bonds. A government bond is a bond that lends money to the state.
How bonds work is covered in “Money you lend, with a promised date attached.”
The world’s debt approaches its economy.
World government debt has reached just under 94% of GDP.
World government debt as a share of world GDP (2025, IMF)
Set to reach 100% by 2029.
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The IMF’s outlook
In April 2026 the International Monetary Fund (IMF) reported that world government debt rose to just under 94% of GDP in 2025 and is set to reach 100% by 2029 — a year earlier than projected the year before.[1]
Large economies are doing the piling.
What drives the debt up is mainly the large economies.
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Who is adding to it
The IMF explains that the build-up is driven largely by the world’s major economies, as rising spending on social needs, defence and more combines with a growing interest burden.[1]
Interest crowds out other spending.
As debt grows, interest payments grow too.
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The link to our lives
As debt grows and rates rise, the interest a government pays each year grows too.[1] The more that goes to interest, the less may be left for other spending.
Government debt connects to our lives through taxes, public services and interest rates.
A scale for reading the national purse.
A scale for reading government debt.
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The size of the debt
How large the debt is relative to the economy. Figures for each country can be checked in the IMF’s data.[1][2]
The speed of growth
How quickly the debt is growing.[1]
Interest payments
How heavy the annual interest bill has become.[1]
This is not advice
This edition explains how government debt works. It does not recommend buying or selling any country’s bonds or currency.
Next question
NEXT QUESTIONMoney you lend, with a promised date attached.NEXT QUESTIONThe deepest tap in money.See the Field Notes shelf →What this edition cannot tell you
- The size of each country’s debt. It can be checked country by country in the IMF’s data.
- Any judgement on whether debt is good or bad. That differs greatly with each country’s circumstances.