Chief Economists Outlook January 2026

Figure 6: Public debt management strategies In the next five years, how likely is it that governments will adopt the following strategies to manage high debt levels? Highly unlikely Unlikely Neither likely nor unlikely Likely Highly likely Rely on higher inflation to decrease debt burden Advanced economies 3 6 24 58 9 Emerging markets 13 26 55 6 Increase public revenues through taxes Advanced economies 21 18 56 6 Emerging markets 16 31 53 Rely on higher growth to decrease debt burden Advanced economies 15 38 41 6 Emerging markets 3 13 19 61 3 Direct private savings and investments to fund public debt Advanced economies 9 24 21 29 18 Emerging markets 19 38 38 6 Increase public revenues through tariffs Advanced economies 12 32 56 Emerging markets 6 31 53 9 Cut public spending and investment Advanced economies 6 38 32 24 Emerging markets 28 34 38 Debt restructuring or default Advanced economies 32 38 24 6 Emerging markets 3 16 28 50 3 Share of respondents (%) Source: Chief Economists Survey. (November 2025). Chief economists were also asked to assess the strategies governments are likely to employ to manage high debt levels. Within advanced economies, higher inflation, taxation and tariffs are expected to be more likely strategies. Within emerging markets, higher growth, inflation, taxation and debt restructuring are expected to be more likely strategies. In both advanced economies and emerging markets, large majorities of chief economists surveyed expect governments to rely on higher inflation to decrease the debt burden over the next five years (67% and 61%, respectively). In many richer economies, this looks increasingly likely.25 Tax increases are also seen as likely, in advanced economies by 62% and in emerging markets by 53% of respondents. This remains a difficult path for policy-makers, as recent experiences in the UK have shown.26 Growing out of debt is more often viewed as a likely strategy in emerging markets. In 2026, the average public debt-to-GDP ratio is projected at nearly 112% in advanced economies, compared with around 77% in emerging markets and middle- income economies.27 Of the chief economists surveyed, 64% agree that this strategy is likely or highly likely to be adopted in emerging market economies within the next five years. In advanced economies, only 47% take the same position. Views on the likelihood of governments directing private savings and investments to fund public debt are mixed for advanced economies. A third considers this as unlikely or highly unlikely, while almost half (47%) consider it a likely or even highly likely outcome. When it comes to tariffs as a source of public revenues, a majority of 56% views this as a likely Chief Economists’ Outlook January 10