How some countries are reversing rising debt by changing how they borrow and govern

# The scale of the problem Global debt — government, household, and corporate — rose to a record $365 trillion in 2026. The United States alone saw federal debt exceed $40 trillion, about double its level a decade earlier and for the first time since World War II larger than the country's annual economic output. IMF managing director Kristalina Georgieva described rising debt as moving "like a staircase not to heaven."

# Where borrowing has grown fastest The biggest borrowers are some of the world's largest economies. Wealthier countries now face pressures similar to those traditionally associated with lower-income, debt-distressed nations: tighter financing conditions, higher debt-service costs, and harder choices about spending and taxation.

# Examples of alternative models A number of smaller and emerging economies have adopted combinations of policies that stabilized their finances and improved market confidence. Concrete examples cited include Jamaica and Costa Rica, both singled out as emerging benchmarks for restraining red ink through a mix of fiscal discipline, data transparency, and reforms that support entrepreneurship.

Several African countries are highlighted for progress after repeated crises. The IMF's African Department director, Abebe Selassie, noted the region's continued reforms. Specific countries mentioned where authorities have won IMF praise or shown improvement include Ghana (after a default), Côte d'Ivoire, Morocco, Rwanda, Burkina Faso, and South Africa. In South Africa, national debt stabilized for the first time in nearly two decades following the election of a centrist, unified government.

# Why these approaches matter now Higher global borrowing costs have hit developed-market bond markets hard. Yet some less-obvious borrowers have seen improving bond-market conditions at the same time. Analysts Jana de Kluiver and Henry Gilfillan pointed to the striking coincidence of tougher global conditions and better outcomes for certain emerging borrowers. The lesson they draw is specific: stronger domestic fundamentals can offset a harsher external environment.

# Common policy moves that worked

• Fiscal discipline: narrowing deficits and reorienting spending to reduce the need for new borrowing.
• Transparency: publishing clear, timely data that helps markets and creditors assess risk.
• Political consensus: building inclusive political arrangements that enable durable agreements on revenue and expenditures.
• Structural reforms: measures that increase space for private entrepreneurs and economic growth.

# What this means for richer borrowers

# Bottom line