Bringing Down High Debt
By Vitor Gaspar and Laura Jaramillo
April 18, 2018
Versions in عربي (Arabic), 中文 (Chinese), Español (Spanish), Français (French), 日本語 (Japanese), Português (Portuguese), Русский (Russian)
High debt makes governments’ financing vulnerable to sudden changes in market sentiment (photo: NYSE-LUCAS JACKSON-REUTERS Newscom).
Global debt hit a new record high of $164 trillion in 2016, the equivalent of 225 percent of global GDP. Both private and public debt have surged over the past decade. High debt […]
Fiscal Costs of Hidden Deficits: Beware—When It Rains, It Pours
By Elva Bova, Marta Ruiz-Arranz, Frederik Toscani, and Elif Ture
(Version in Español)
Budgets can be full of surprises. And not always good ones. Often times, debt increases significantly because an unforeseen obligation materializes. These contingent liabilities, as they are known in the economist’s jargon, can have significant economic and fiscal costs. In fact, on many occasions, large and unexpected increases in debt across the world were due to the materialization of contingent liabilities. That is why they are often called hidden deficits.
U.S. Fiscal Policy: A Tough Balancing Act
By Deniz Igan
(Version in Español)
Much has changed on the fiscal front since we started worrying about U.S. fiscal sustainability. The federal government budget deficit has fallen sharply in recent years―from almost 12 percent of GDP in 2009 to less than 7 percent in 2012. And recent budget reports show that the deficit is shrinking faster than expected only a few months ago, to a projected 4½ percent of GDP for the current fiscal year, which ends September 30. Plus, health care cost growth has […]
Mind The Gap: Policies To Jump Start Growth in the U.K.
The effects of a persistently weak economy and high long-term unemployment can reverberate through a country’s economy long into the future—commonly referred to by economists as hysteresis. Our analysis shows that the large and sustained output gap, the difference between what an economy could produce and what it is producing, raises the danger that a downturn reduces the economy’s productive capacity and permanently depresses potential GDP.
Signs of Fiscal Progress: Will It Be Enough?
We’ve just updated our latest assessment of the state of government finances, debts, and deficits in advanced and emerging economies. Fiscal adjustment is continuing in the advanced economies at a speed that is broadly appropriate, and roughly what we projected three months ago. In emerging economies there’s a pause in fiscal adjustment this year and next, but this too is generally appropriate, given that many of these countries have low debt and deficits.
Global Financial Stability: What’s Still To Be Done?
The quest for lasting financial stability is still fraught with risks. The latest Global Financial Stability Report has two key messages: policy actions have brought gains to global financial stability since our September report; but current policy efforts are not enough to achieve lasting stability, both in Europe and some other advanced economies, in particular the United States and Japan.
Disappearing Deficits
In our work at the IMF, we sometimes discover that governments choose to employ accounting devices—or stratagems that make the deficit smaller without actually causing any pain, and without actually improving public finances. In ideal accounting, this would not be possible. In real accounting, it sometimes is.
Christine Lagarde on Sovereign Debt, Growth and Social Instability
The IMF chief gave a speech in New York City today that sets out how the IMF can help countries tackle this troika of challenges to the global economy.
Postcard from São Paulo: the Latest Global Fiscal News–and Some of It’s Actually Good
In São Paulo, Brazil last Friday we launched our latest assessment of the state of government finances, debts and deficits. While many countries are slogging through a tough fiscal time, there is some good news, including in the United States ̶ the deficit will be lower this year than previously expected. I will also give you an assessment of how the new information affects our sense of what needs to be done in the future.