The International Monetary Fund warned Wednesday that the public debt situation worldwide could be more dire than most think, highlighting skyrocketing fiscal deficits in the U.S. and China.

Global public debt will rise above $100 trillion by the end of 2024, the agency projected in its annual fiscal monitor report. By the end of the decade, the IMF forecasts global public debt will reach 100% of world GDP. 

The U.S. and China account for a significant share of rising public debt levels. If the two countries were excluded from calculations, the global public debt to GDP ratio would fall around 20%, the IMF said. 

“Public debt may be worse than it looks,” IMF director of fiscal affairs Vitor Gaspar said, adding that governments’ debt calculations suffer from an optimism bias and are prone to underestimation. 

Governments are facing a “fiscal policy trilemma,” caught between needing to spend more to ensure security and growth, while facing resistance toward higher taxation while public debt levels become less sustainable, per the report. Poor countries in sub-Saharan Africa are most under pressure between the need to spend to alleviate poverty while struggling with lower tax capabilities and worse finance conditions. 

Unsustainable debt levels place countries’ markets at risk of a sudden sell-off if investors view a country’s fiscal health as too poor. This uncertainty, even across advanced economies with higher debt tolerance such as the U.S. and China, can lead to a spillover effect of higher borrowing costs to other economies.

The Treasury Department announced earlier in October that the U.S.’s  budget deficit has risen to $1.833 trillion, the highest level outside of the pandemic era. In recent years, the U.S. has approached several government shutdowns as government funding bills become more contentious between politicians amid growing concerns of the country’s fiscal health.