2024-04-19 14:33:29
Moderate fiscal tightening is expected to resume this year.
As Day.Az reported on Wednesday with reference to Trend, the director of the IMF’s Fiscal Affairs Department, Vitor Gaspar, said this today during a briefing on financial monitoring (Fiscal Monitor), held as part of the IMF spring meetings in Washington.
He noted that the global economic and financial situation has improved, inflation has fallen, and risks to the global outlook are becoming balanced.
“The time has come to shift attention to fiscal policy. Global public debt rose to 93 percent of GDP in 2023 and remained nine percentage points above pre-pandemic levels. Moderate fiscal tightening is expected to resume this year, but significant uncertainty remains over a record number of countries in the world where more than half the population participates in elections,” Gaspard explained.
He said data shows that in election years the deficit is four percentage points higher than budgeted.
“Looking ahead, global government debt is projected to approach 100 percent of GDP by the end of the decade. This rise in global government debt is primarily driven by the situation in China and the United States, where government debt is now higher and is expected to , will grow faster than predicted before the pandemic. Although fiscal tightening is projected to be modest over the medium term, it will not be enough to stabilize public debt in many countries. Under current policies, primary deficits will remain above this stabilizing level in about a third of countries. “Higher real interest rates and lower medium-term growth prospects are adding pressure to earnings,” Gaspar said.
He noted that against this backdrop, the IMF’s latest financial report calls for long-term fiscal tightening to protect public finances.
“The consolidation framework must be calibrated depending on the fiscal risks and macroeconomic conditions facing each country. Addressing debt and deficits today will help avoid more painful changes in the future. Fiscal tightening will also be important in ending the last mile of deflation, especially in countries characterized by excess demand,” said the Director of the Department.
It should be noted that on April 15, the Spring Meetings of the International Monetary Fund and the World Bank Group started in Washington.
Major ministerial meetings and events will be held April 17-19, and other meetings will be held April 15-20.
Key events include meetings of the Development Committee and the International Monetary and Financial Committee of the IMF, which discuss the progress of the work of the World Bank Group and the IMF.
The Spring Meetings bring together central bankers, finance and development ministers, parliamentarians, private sector representatives, civil society organizations and academics to discuss issues of global concern, including the global economy, poverty eradication, and economic development.
Subscribe to our WhatsApp channel and stay up to date with the main news!