A man walks past signage for the the 2024 IMF/World Bank Annual Meetings outside of the headquarters of the International Monetary Fund in Washington, DC on October 18, 2024.
Daniel Slim | AFP | Getty Images
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.
Higher German infrastructure spending will boost Europe’s economic growth in the coming years — but not enough to outweigh the expected drag from U.S. tariffs, according to Alfred Kammer, director of the European department at the International Monetary Fund.
The IMF last week cut its growth outlook for the euro area, also making downgrades for the U.S., U.K. and many Asian countries due to President Donald Trump’s volatile tariff policy.
The institution cut its euro area growth forecasts for each of the next two years by 0.2 percentage points, to 0.8% in 2025 and 1.2% in 2026.
“It’s the tariffs and the trade tensions which weigh on the outlook rather than the positive effects on the fiscal side,” Kammer told CNBC’s Carolin Roth in an interview at the IMF-World Bank Spring Meetings last week.
“What we see is we have a meaningful downgrade for Europe advanced economies… and for the emerging euro area countries double as much over this two-year period.”
The negative impact of tariffs will be slightly offset by Germany’s recent infrastructure spending bill, which will boost growth in the euro area over those two years, Kammer said.
Exemptions passed to Germany’s longstanding debt rules have unlocked higher defense spending and enabled creation of a 500 billion euro ($548 billion) infrastructure and climate fund. The move has been described by economists as a potential “game changer” for the sluggish economy — the largest in the euro zone.
Several policymakers at the European Central Bank told CNBC last week that while the inflation path appeared positive — with tariffs potentially bringing inflation in the bloc down further — their broader outlook was now significantly more uncertain.
The IMF’s Kammer said that the ECB should only cut interest rates once more this year, by a quarter percentage point, despite growth risks.
The ECB has so far reduced rates seven times in quarter-percentage-point increments, starting in June 2024. Its most recent move lower in April took the deposit facility, its key rate, to 2.25%.
“We have a very clear recommendation for the ECB. What we saw so far is a huge success in the disinflation effort and monetary policy has worked … so we are expecting to sustainably hit the 2% inflation target in the second half of 2025,” Kammer told CNBC.
“Our recommendation is there is room for one more 25-basis-point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy,” he added.
Overnight index swap pricing on Monday pointed to market expectations for two more quarter-point cuts this year.
SIX ESTEEMED sommeliers sit silently behind a judging table. A waiter tops up their glasses one by one and they appraise the stuff: sniff, hold it to the light, sometimes swirl, sip, swish between cheeks, dump the extras and give it a score. But the liquid is no Zinfandel or Syrah. Instead the bon viveurs are tasting high-end waters.
Homemade barbecue pork chops. Katy Perry performs onstage during the Katy Perry The Lifetimes Tour 2025. A woman checks her receipt while exiting a store.
iStock| Theo Wargo | Hispanolistic | Getty Images
A few weeks ago, as Kiki Rough felt increasingly concerned about the state of the economy, she began thinking about previous periods of financial hardship.
Rough thought about the skills she learned about making groceries stretch during the tough times that accompanied past economic downturns. Facing similar feelings of uncertainty about the country’s financial future, she began making video guides to recipes from cookbooks published during previous recessions, depressions and wartimes.
The 28-year-old told followers that she is not a professional chef, but instead earned her stripes by learning to cook while on food stamps. From Rough’s yellow-and-black kitchen in the Chicago suburbs, she teaches viewers how to make cheap meals and at-home replacements for items like breakfast strudel or donuts. She often reminds people to replace ingredients with alternatives they already have in the pantry.
“I keep seeing this joke over and over in the comments: The old poors teaching the new poors,” Rough told CNBC. “We just need to share knowledge right now because everyone is scared, and learning is going to give people the security to navigate these situations.”
The self-employed consultant’s videos quickly found an audience on TikTok and Instagram. Between both platforms, she’s gained 350,000 followers and garnered about 21 million views on videos over the last month, by her count.
President Donald Trump’s announcement of broad and steep tariffs earlier in April has ratcheted up fears of the U.S. economy tipping into a recession in recent weeks. As Americans like Rough grow increasingly worried about the road ahead, they are harking back to the tips and tricks they employed to scrape by during dark financial chapters like the global financial crisis that exploded in 2008.
Google is predicting a spike in search volumes this month for terms related to the recession that came to define the late 2000s. Searches for the “Global Financial Crisis” are expected to hit levels not seen since 2010, while inquiries for the “Great Recession” are slated to be at their highest rate since the onset of the Covid pandemic.
“This is, potentially, at least on a large scale, the first time that millennials have been able to be the ‘experts’ on something,” said Scott Sills, a 33-year-old marketer in Louisiana. “We’re the experts on getting the rug pulled out from under us.”
Those doling out the advice are taking a trip down memory lane the to tail-end of the aughts. Cheap getaways to Florida were the norm instead of lush trips abroad. They had folders for receipts in case big-ticket purchases went on sale later. Business casual outfits were commonplace at social events because they couldn’t afford multiple styles of clothing.
Porkchops were a staple dinner given their relative affordability, leading one creator to declare that they “taste like” the Great Recession. They drank “jungle juice” at house parties, a concoction of various cheap liquors and mixers, instead of cocktails at bars.
“There’s things that I didn’t realize were ‘recession indicators’ the first time around that I thought were just the trends,” said M.A. Lakewood, a writer and professional fundraiser in upstate New York. “Now, you can see it coming from 10 miles away.”
Customers shop for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas.
Brandon Bell | Getty Images
To be sure, some of the discourse has centered around how inflationary pressures have made a handful of these hacks defunct. Some content creators pointed out that the federal minimum wage has sat at $7.25 per hour since 2009 despite the cost of living skyrocketing.
Kimberly Casamento recently began a TikTok series walking viewers through recipes from a cookbook that was focused on affordable meals published in 2009. The New Jersey-based digital media manager said she’s found costs for what were then considered low-budget meals ballooning between about 100% and 150%. In addition to sharing the price changes, the 33-year-old gives viewers some tips on how to keep costs down.
“Every aspect of life is so expensive that it’s hard for anybody to survive,” Casamento said. “If you can cut the cost of your meal by $5, then that’s a win.”
Still, she said there’s broad uncertainty felt today on several fronts — be it tied to the economy, geopolitics or domestic policy priorities like slashing the federal workforce or limiting immigration. That can reignite the feeling of unpredictability about what the future will bring that was paramount during the Great Recession, Way said.
In 2025, it’s clear that economic confidence among the average American is rapidly souring. The University of Michigan’s index of consumer sentiment recorded one of its worst readings in more than seven decades this month.
With that negative economic outlook comes rising stress. When Lukas Battle made a satirical TikTok about feeling like divorces were increasingly common around the time of the Great Recession, the 27-year-old’s comments were abuzz with people talking about their parents splitting recently. (Though divorce has been seen as a cultural hallmark of the financial crisis, data shows the rate actually declined during this period.)
“There’s a second round of divorces happening as we speak,” Battle said.
Disney‘s reboot of the animated show “Phineas and Ferb,” which originally premiered in the late 2000s, similarly put the era top of mind.
Lady Gaga performing at Coachella 2017
Getty Images | Christopher Polk
“Recession pop,” a phrase mainly referring to the subgenre of trendy music that dropped during the Global Financial Crisis, has caught a second wave over the past year as Americans contended with inflation and high interest rates.
In 2008, artists such as Miley Cyrus, Lady Gaga and Katy Perry regularly appeared on the music charts. Both Cyrus and Gaga have released new songs this year. Perry kicked off a world tour this week.
“It’s almost a permission to feel good, whether that’s through song or something,” said Sills, the marketer in Louisiana. “It’s not necessarily ignoring the problems that are here, but just maybe finding some sort of joy or fun in the midst of all of it.”