2024-04-18 00:00:46
Warning of rising debt in each country in ‘global super election year’
“In an election year, deficit GDP forecast tends to exceed 0.4%p”
“Global public debt expected to reach 98% of GDP by 2029”
The International Monetary Fund (IMF) announced that, with this year being a global super election year, government debt risks are increasing worldwide and that efforts for sustainable fiscal soundness are needed.
According to foreign media outlets such as AFP, the IMF said in its Fiscal Monitor released on the 17th (local time), “The fiscal deficit in an election year is predicted to be up to 0.4% of gross domestic product (GDP) compared to a non-election year. “There is a tendency for it to exceed ,” he said. “Governments of each country must curb fiscal spending to ensure sound public finances.”
This year, elections will be held in 88 countries, home to more than half of the world’s population. Governments tend to spend more and tax less during election periods.
The IMF pointed out, “We expect moderate fiscal tightening this year, but significant uncertainty exists,” adding, “This uncertainty is due to the fact that it is a ‘super election year.’” He added, “Given the connection between fiscal policy and politics, it is entirely reasonable to believe that political factors and political discourse will play an additional role.”
The IMF said in a report, “Global government debt increased slightly to 93% of GDP last year, which is 9 percentage points higher than the level before the (COVID-19) pandemic,” and added, “In particular, the United States and China, the two largest economies, led the increase. “I did it,” he said. In the United States and China, government debt increased by more than 2 and 6 percentage points of GDP, respectively.
The IMF also said, “Considering current fiscal spending and taxation levels, global public debt will increase from 93% of GDP last year to 98% in 2029,” and “Under current policies, global government debt will continue to exceed historical highs.” “It is expected to increase,” he predicted.
The IMF predicts that the U.S. fiscal deficit will remain above 6% of GDP for the next five years. It is predicted that China’s fiscal deficit will remain high for the next five years, increasing from about 7% of GDP last year to about 8% in 2029.
The IMF said, “The United States has sufficient fiscal space. “There are many steps that can be taken in terms of spending and revenue,” he said. “China also has policy room to correct the situation, but it must act quickly to ensure local government financial confidence at risk from real estate development.” .
The IMF also emphasized, “Considering that many countries are expected to ease monetary tightening policies through interest rate cuts later this year, each country must exert new momentum to strengthen its fiscal soundness.”
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2024-04-18 00:00:46