After two years of decline, state debts should increase worldwide to return to pre-pandemic levels by 2028 if nothing is done about it, the IMF warned on Wednesday.
This is at least the conclusion of the report on budgetary policies, the Fiscal Monitor, released by the International Monetary Fund (IMF).
“We have seen a marked adjustment in the debt ratio after the increase observed in 2020, thanks to the reopening of the economy and the strong recovery observed but also due to inflation, because it was unexpected, which has contributed to temporarily increasing tax collection”, the director of the Department of Budgetary Affairs of the fund, told AFP. Vitor Gaspar.
“But we see a stabilization in the fall in public deficits and even an investment relative to the debt, which rises again in 2023. The consequence is that the level of debt in 2028 should return to close to 100% of GDP”, a level reached during the COVID pandemic, the official added.
This is a rebound in the debt ratio of most developed and emerging countries, with the notable exception of the euro area.
China and the United States are especially concerned, since their debt to GDP ratio should reach 100% and 135%, respectively, in 5 years, levels never seen before in both countries.
For China, this will even represent a doubling of the pre-pandemic level of debt, the IMF said.
The first two economic powers will also account for most of the cumulative increase to 2028, the agency stressed.
Source: AFP
Source: Gestion
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