Business Top Stories

Covid-19: IMF sees debt surging to 100% of global GDP

Massive borrowings by governments to fund coronavirus (Covid-19) pandemic-induced stimulus packages will push public debt to a record of nearly 100 percent of global economic output this year, the International Monetary Fund (IMF) has said.

The fund, which made the prediction in its latest Fiscal Monitor report released yesterday, also said it expected government budget deficits to swell to 12.7per cent of GDP from 3.9per cent in 2020, an almost 9 percentage point difference. However, the IMF said the spike in global debt could be a one-off event if growth rebounds next year. Reuters quoted IMF’s Fiscal Affairs Director, Vitor Gaspar, as saying “what we see is a one off, jump up of debt in 2020, then stabilisation after 2021, and even a slight downward trend in 2025.” According to Gaspar, while public debt will stay elevated at about 100per cent of GDP, resumption of economic growth and extremely low interest rates will help ease primary budget deficits.

“The difference between interest rates and growth is not only negative, but more negative – in our projections – than it was before COVID-19. So low interest rates play an important role in debt dynamics,” he said.

But the IMF said there was wide divergence among the fiscal outlooks for member countries, with advanced economies taking on the biggest increase in debt burdens, while poorer developing countries faced a tougher task of recovering from economic damage as more people fall into poverty. Advanced countries will see budget deficits growing by 11per cent of GDP, with the United States jumping 11 percentage points to 18.7per cent of GDP and Canada’s rising to 20per cent, the IMF said. Emerging markets, which have fewer resources, will see their deficits double as a share of GDP to about 11per cent.

The IMF said its estimates were subject to “sizable fiscal risks” from a longer pandemic and recession that deteriorates balance sheets, increases bankruptcies and prompts abrupt commodity price movements and tighter financial conditions. Meanwhile, releasing Global Policy Agenda, at the start of the annual meetings of the IMF and the World Bank, the fund’s Managing Director, Kristalina Georgieva, yesterday proposed three policy priorities, including, continuing with essential measures to protect lives and livelihoods, building a more resilient and inclusive economy, and dealing with debt, to overcome the Covid-19 crisis and build a brighter future.

She said that nine months into the pandemic, the world is still struggling with the darkness of a crisis that has taken more than a million lives, and driven the economy into reverse, causing sharply higher unemployment, rising poverty, and the risk of “a lost generation” in lowincome countries.

“More than ever, we need strong international cooperation – especially on vaccine development and distribution. Faster progress on medical solutions could speed up the recovery; it could add almost USD nine trillion to global income by 2025. Which, in turn, could help narrow the income gap between poorer and richer nations,” Georgieva said. She warned that halting spending aimed at containing the coronavirus pandemic and mitigating its economic consequences could have serious consequences for the global economy.

SHOCKING LIFE STORY!!!

Abuja Man reveals (FREE) secret Fruits that Increased his Manh00d size and Lasting Power in 5days…

CLICK HERE TO GET IT!!!

%d bloggers like this:
Fake Richard Mille Replica Watches, www.richardmille.to The ceramic upper and lower cases are imported from Taiwan and are processed by ATPT ceramics to form Y-TZP ceramics. After high-tech anti-fingerprint technology, they present a delicate and soft sub-black material. This color quality has remained unchanged for a hundred years. The color and luster are more detailed to achieve the ceramic tone visual pattern electroplating upper and lower shells that are infinitely close to the original products, with anti-reflective coating sapphire glass! The tape uses a soft and delicate Malaysian imported top rubber strap, and the movement is equipped with an imported Seiko NH movement. The buckle of this version is made according to the original size and thinness, making it feel more comfortable and intimate, the highest version on the market Richard Mille Replica