IMF Warns Rising Public Debt Poses Major Risk to Global Economy
The IMF has warned that rising global public debt, particularly the United States’ massive debt, is increasing risks to the global economy.
The International Monetary Fund (IMF) has warned that the global economy is increasingly at risk due to rising public debt levels. In its latest Fiscal Monitor report, IMF officials highlighted that the national debt of the United States, which has exceeded $39 trillion, is a major contributor to global financial vulnerability.
According to Rodrigo Valdés, Director of Fiscal Affairs at the IMF, ongoing conflicts in the Middle East, rising fuel prices, and weak public finances are reducing the ability of many countries to withstand economic shocks.
The report projects that global public debt will reach 99% of global GDP by 2028. In a worst-case scenario, it could surge to as high as 121%.
Similarly, the debt of the United States is expected to approach 125% of GDP and could exceed 142% by 2031, raising further concerns among policymakers.
Meanwhile, the IMF has identified Artificial Intelligence (AI) as a potential tool to boost productivity and improve tax systems, while also cautioning about the risks associated with its rapid adoption.