IMF warns global public debt, fiscal deficits to reach all-time high
Published : Friday, 10 July, 2020 at 10:34 PM Count : 192
A top IMF official on Friday warned that the global public debt is expected to exceed 100 per cent of the GDP in 2020-21, and the average overall fiscal deficit is expected to soar to 14 per cent of the GDP in 2020, pointing out that never have public debt and deficits risen so high and so fast.
Vitor Gaspar, director of the International Monetary Fund's fiscal affairs department, told PTI that the government's debt and deficits have risen as a result of steep contraction in output and a huge discretionary support with declining revenue.
"Global debt will reach the highest percentage of GDP in 2020-21, up from about 20 percentage points a year ago," he said, adding that debt growth is the most significant in developed economies such as the United States, Japan and Europe.
"Meanwhile, the average overall fiscal deficit will reach 14 percent of GDP in 2020, up ten percentage points from last year. Public debt and deficits have not increased so much and so fast, ”he said.
Gaspar noted that this worldwide public record has a record low interest rate in both developed and emerging market economies.