South African G20 Presidency and emerging market economies: Time to review the debt sustainability and domestic tax mobilisation framework

Abstract

The G20 Finance Ministers and Central Bank Governors met on 17 and 18 July 2025 in Durban, South Africa. While acknowledging the heightened uncertainty and complex challenges of the global economy, the meeting emphasised that high levels of debt can impact economic growth, financial and price stability.1 The Communiqué after the meeting mentioned that “in light of high public debt and fiscal pressures, we recognise the need to raise long-term growth potential by pursuing growth-oriented macroeconomic policies, while building fiscal buffers, ensuring fiscal sustainability, encouraging public and private investments and undertaking productivity-enhancing reforms”.2 Debt buildup is evident from the recently published International Monetary Fund’s (IMF) Global Debt Database. The global public and private debt soared to 258% of gross domestic product (GDP) in the pandemic year 2020.3. Although it declined to 235% of GDP in 2024, it remained significantly higher than the pre-COVID-19 levels of 219% observed between 2010 and 2019. In United States (US) dollar terms, the total global debt (public + private) reached US$251 trillion in 2024.4