International Monetary Fund chief Kristalina Georgieva predicted a decline in inflation in advanced economies by the middle of next year.
The IMF said that after the debt burden increased last year in the midst of the Covid-19 pandemic, governments must take care to “control” spending, according to a report released Wednesday by the International Monetary Fund.
In 2020, global debt, including public and private lending, increased “by 14% to one record of $ 226 trillion, “according to the International Monetary Fund’s Financial Monitor report.
The Director of the Financial Affairs Department of the International Monetary Fund, Vitor Gaspar, said:Many countries suffer from debt difficulties or are very vulnerable to this problem..
In a statement to reporters, Gaspar said it was “urgent” to make progress in a framework aimed at helping those countries at risk, calling once again the International Monetary Fund and the World Bank to take action before the expiry of the initiative to suspend the debt service approved by the Group of Twenty at the end of the year, according to “AFP” . “.
“While recognizing that the international community has provided vital support to mitigate financial vulnerabilities in low-income countries, further efforts are still needed,” he added.
Public debt has reached $ 88 trillion, or nearly 100% of GDP, knowing that expectations indicate its decline will be gradual, according to the report, amid the risks of the private debt surplus transforming. in public debt.
Gaspard stressed that “countries will have to adjust their policies in according to your circumstances “.
Massive government support has helped alleviate the economic damage caused by the pandemic and its repercussions on the health sector. Gaspard said that extensive support packages in the United States and in Europe “could add $ 4.6 trillion to global GDP between 2021 and 2026 if fully implemented”.
In economically advanced countries in progress has been made in containing the virus, spending is starting to move away from the immediate crisis and towards digital and green policies, and efforts to “make economies more inclusive” have survived.
Gaspard noted that the US budget proposals, for example, “aim to reduce inequality and could reduce poverty by about a third.”
However, he said, emerging markets and countries in via low-income development companies “face more difficult prospects” and “negative long-term impacts”, as lower tax revenues due to the current crisis will limit the potential for investment in development.
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