From richest to most indebted: How Trump’s policies could push US deeper into debt than Italy and Greece | Explained

US President Donald Trump reacts as he leaves after delivering a speech in front of US Navy personnel on board the US Navy's USS George Washington aircraft carrier at the US naval base in Yokosuka on October 28, 2025. (Photo by ANDREW CABALLERO-REYNOLDS / AFP)

The United States, long regarded as the world’s wealthiest nation, could soon also become one of its most indebted. New projections from the International Monetary Fund (IMF) suggest that under President Donald Trump’s second term, the country’s public debt could surpass that of Italy and Greece by the end of the decade.

According to a report by The Guardian, which cited IMF forecasts, a mix of sweeping tax cuts, record defence spending, and persistent budget deficits is expected to push US debt to unprecedented levels. The IMF projects that America’s debt will rise from 125 percent to 143 percent of its annual income by 2030. By comparison, Italy’s debt is expected to stabilise around 137 percent, while Greece’s is forecast to fall from 146 percent to 130 percent.

Greece, once at the heart of Europe’s debt crisis, has dramatically reduced its deficit after years of austerity and reform. IMF data shows that Athens has managed to shrink a budget overspend that peaked at 210 percent of GDP in 2020.

Rising deficit and tax cuts fuel US debt

Amid Trump’s renewed tax cuts for corporations and high earners, the US is projected to run annual budget deficits exceeding 7 percent of GDP over the next five years. By contrast, Italy plans to cut its deficit to 2.9 percent this year, meeting the European Union’s 3 percent fiscal limit ahead of schedule, according to analysis first reported by the Financial Times.

Trump’s so-called “big, beautiful bill,” passed by Congress earlier this year, rolled back many of the deficit-control measures introduced under the Biden administration. The legislation deepened Washington’s dependence on borrowing to fund spending.

His flagship project, a proposed $1 trillion “golden dome” missile defence shield, is part of a wider expansionary agenda that could push the federal deficit up by as much as $7 trillion annually by the time Trump leaves office in January 2029, The Guardian reported.

Europe’s debt stabilises as US borrowing rises

While the United States continues to expand spending, Italy and Greece have both shifted toward fiscal discipline. Both countries are now running primary budget surpluses, meaning their governments collect more in taxes than they spend, excluding interest payments.

Italy’s deficit, in particular, is expected to fall to 2.9 percent this year. However, experts say Rome remains vulnerable to external shocks and political pressure.

Lorenzo Codogno, head of Lorenzo Codogno Macro Advisors and former chief economist at Italy’s Treasury, told The Guardian that Italy still faces challenges from global shifts driven by Washington’s policies. “The economy and public finances remain vulnerable to a sudden negative shift in the global scenario,” he said.

Analysts see a symbolic turning point

Mahmood Pradhan, head of global macro at the Amundi Investment Institute, told the Financial Times that the IMF’s findings mark a historic moment for the United States.

“It is a symbolic moment, and according to the Congressional Budget Office the projections are for US debt to carry on rising – that is the impact of running perpetual deficits,” he said. Pradhan, however, cautioned that Italy’s weak growth outlook means it is “not out of the woods” either.

James Knightley, chief international economist at ING, said the numbers represent a change in how the world views America’s fiscal standing compared to Europe’s.

“Many US politicians and investors look down somewhat on Europe and its slow growth and struggling economies, but when you have metrics like this, the conversation changes,” Knightley told The Guardian.