Debt, and why governments need to reduce it, will top the agenda at this week’s annual meetings of the International Monetary Fund and World Bank in Washington.

Finance ministers and central bank governors from around the world will gather in the US capital alongside thinktank and charity bosses to discuss the state of the global economy and its ability to generate a higher standard of living.

Rachel Reeves will be among those told to start to paying down debts accumulated in the crisis years since 2020.

The IMF is expected to argue that the debt mountain is getting out of control. The US and China have borrowed heavily since the financial crash of 2008 to keep the wheels of their economies turning, returning again to the bond markets through the pandemic and more recently to support households and businesses hit by the inflation shock. The UK and France are among European countries that have trodden the same path.

All of them have been rebuked by the IMF for allowing public debts to climb to 100% of annual national income.

The UK is among a clutch of countries that includes Brazil, France, Italy and South Africa, where debt is expected to carry on rising without a concerted effort by ministers to reverse the trend. These are countries, says the IMF, where the underlying demands for more welfare and health spending could easily spiral.

In a warning based on research that debt levels can run away from politicians without tough measures in place, it said: “Future debt levels could be even higher than projected, and much larger fiscal adjustments than currently projected are required to stabilise or reduce it with a high probability.”

As a benchmark, the proportion of debt to national income, or gross domestic product (GDP) is the most popular measure of debt sustainability. Italy’s debt-to-GDP ratio is above 130%, while the US ratio stands at 124%. Greece has a ratio of about 160% and Japan’s is more than 260%.

The IMF forecasts that global public debt will exceed $100tn by the end of this year.

The UK chancellor will travel to Washington with a relatively modest debt-to-GDP ratio that only recently edged above 100%. That shields her from the worst of the IMF’s dismay, but she is still vulnerable to the accusation that the UK is not doing enough to support developing nations crippled by debt payments.

While poorer countries tend to have lower debt-to-GDP ratios, they are weighed down by stratospheric interest rates that mean much higher borrowing costs relative to tax income.

World Bank boss Ajay Banga will try to turn the attention of rich countries to the debts of the poorest countries, many of which are struggling to pay their monthly interest bills.

A report by the anti-poverty charity Development Finance International (DFI) shows that debt servicing costs are absorbing an average 42% of spending in all 146 countries on the World Bank’s list of the least well off, and 55% in Africa. DFI complains that these countries must use tax revenues to pay interest bills that would otherwise be deployed to improve basic health and education services and tackle the climate crisis. The alternative is to raise new debt to pay for the existing commitments.

At a press conference before the meetings, Banga said debt cancellation was a difficult process now that most loans were complex and multilayered. He said some of the worst-hit countries were negotiating to secure debt forgiveness, but it was a long, hard road.

However, he said debt forgiveness should be the aim and he was working on ways to ease service costs to improve development outcomes.

Banga said the Bank had already answered calls for its share of debt relief in restructurings by providing billions of dollars in additional grants and discounted loans to debtor countries.

Between $16bn and $17bn has gone to Zambia, Chad, Ethiopia and Ghana in their debt restructuring processes.

“Effectively, what we’re doing is giving them the lifeline they need, whether you do it as a debt forgiveness or you give them a grant,” Banga said. “Debt forgiveness is required, but not from us. It’s required from those creditors. That’s the issue we’re trying to work our way through.”

Reeves will be asked to play a part in offering more resources to poorer nations after several years of cuts to international aid by the previous Conservative government. But with a budget looming and Labour under pressure to devote every penny to pleasing the likes of the IMF to bring down debts, Banga is likely to be disappointed.