The International Monetary Fund (IMF) warned Wednesday about the high risks to public debt and called on policymakers to implement durable and carefully designed fiscal adjustments.
The deficits are high and the global public debt is very high, growing and risky. Global public debt is expected to exceed $100 trillion this year, Vitor Gaspar, director of the IMF’s Department of Fiscal Affairs, said at a press conference during the current IMF Annual Meetings and the World Bank Group of 2024.
According to Gaspar, at the current rate, the debt-to-world GDP ratio will be close to 100 percent by the end of the decade, above the peak of the pandemic.
The IMF official noted that public debt is higher and is expected to grow faster than before the pandemic in about a third of countries. This includes not only the largest economies, China and the United States, but also other large countries such as Brazil, France, Italy, South Africa and the United Kingdom, which represent a total of about 70 percent of world GDP, he added.
At the press conference, Gaspar told the hearing that the fiscal plans that governments have put in place are insufficient to achieve stable or declining public debt ratios with a high degree of confidence.
Is there a need for additional efforts. Delaying the adjustment is costly and risky. It’s not possible to postpone the problem. It’s time to act, Gaspar stressed.
This article has been translated after first appearing in El Pais