Greece’s public debt will fall to 136% of gross domestic product (GDP) in 2026 from 146.6% in 2025, before declining further to 128.7% in 2027 and 111.1% in 2031, according to forecasts released by the International Monetary Fund (IMF).
The projections appear in the IMF’s World Economic Outlook Database, published in connection with its annual meetings in Bangkok. The Fund expects Greece’s debt reduction to be slightly faster this year and in 2027 than it forecast in April, when it projected ratios of 136.9% and 130.3%, respectively.
Greece’s debt ratio will fall below Italy’s 137.9% of GDP this year, according to the IMF. By 2031, Greece is also expected to have a lower debt ratio than France, whose debt is projected to rise gradually to 123.6%, and Belgium, at 122.1%.
Greece’s projected debt ratio in 2031 will also fall below the 115.2% average forecast for advanced economies. The IMF expects US public debt to climb sharply to 145% of GDP, while Japan’s debt will gradually decline but remain the highest among advanced economies, at 188.9%.
Primary surpluses to support debt reduction
Primary budget surpluses will underpin Greece’s rapid debt reduction, although the surpluses are expected to gradually narrow while remaining above 2% of GDP.
The IMF projects Greece’s primary surplus at 3.4% of GDP in 2026, down from 4.9% in 2025. It expects the surplus to reach 2.6% in 2027 and 2.4% in 2031.
The overall fiscal balance, which includes interest payments on public debt, is forecast to record a surplus of 0.3% of GDP in 2026, compared with a surplus of 1.7% in 2025. The IMF projects deficits of 0.6% in 2027 and approximately 1% in 2031.
Government revenue is expected to remain around 50% of GDP in 2026, broadly unchanged from 2025, before falling to 48.6% in 2027 and 48% in 2031.
Government expenditure is projected to rise to 49.7% of GDP in 2026 from 48.3% in 2025, before declining to 49.3% in 2027 and approximately 49% in 2031.
IMF urges advanced economies to tackle mounting debt
In its Fiscal Monitor blog, the IMF warned that high public debt in major advanced economies, particularly the United States, is a key factor driving bond yields higher. It urged these countries to take urgent action to put their debt on a sustainable path and limit the impact on the rest of the world.
The Fund noted that long-term government bond yields have risen sharply across several major advanced economies. Between February and September, the average yield on 10-year government bonds across the Group of Seven (G7) rose by more than one percentage point, reaching its highest level in almost two decades.
Several factors are pushing yields higher, including a sharp increase in oil prices, persistent inflation, stronger demand for investment and higher growth expectations associated with artificial intelligence, the IMF said.
However, the Fund stressed that underlying fiscal conditions remain decisive. High debt levels, spending pressures and expectations of substantial bond issuance in the coming years are increasing the returns investors demand to hold long-term government debt.
US interest payments projected to double
In the United States, interest payments on public debt are projected to rise from approximately 2.8% of GDP before the pandemic to 5.7% in 2031, an amount equivalent to the country’s projected spending on Social Security.
The IMF warned that higher bond yields leave governments with less room to delay fiscal adjustments.
“Large advanced economies with high debt need concrete measures based on credible medium-term plans and realistic assumptions,” the Fund said.
Such measures are necessary to put debt on a sustainable path, contain borrowing costs and limit spillover effects on other countries.
Delaying fiscal adjustments would increase interest costs and fiscal vulnerabilities, further restrict governments’ policy options and ultimately require a larger adjustment to stabilise debt, the IMF warned.
“The longer countries wait, the more painful the adjustment becomes,” the Fund said.
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