Economy Desk: Another 15 trillion or more than 15 trillion dollars were added to the global debt stock last year. As a result, total global debt rose to a new record high of $313 trillion. A recent report published by the International Monetary Fund (IMF) has highlighted such information.
According to an IMF blog post, the global economic situation has improved slightly in the last six months. Inflation rates have declined in almost all developed countries except the United States. But rising government debt is now cause for concern in many countries. As the government’s debt increases, dealing with its impact is becoming a major challenge. Four years after the start of the pandemic, government spending in developed countries is now 3 percentage points of GDP higher than pre-pandemic forecasts. The world’s two major economies, the United States and China, are at the top in terms of public debt growth. Four years after the start of the pandemic, public debt in these two countries increased by 2 and 6 percentage points, respectively. The global economy depends a lot on the economic situation of these two countries. Slowing China’s growth slows global growth and trade. As a result, countries that are heavily dependent on trade and investment are at a disadvantage. At the same time, if the interest rate on Treasury bonds in the United States rises, investment flows around the world decline.
General elections are being held in many countries around the world throughout the year 2024. About half of the world’s population lives in these countries. Historically, election years have seen increases in government spending and decreases in tax rates. In an election year, the country’s government’s fiscal deficit rose by 0.4 percentage points higher than forecast. The IMF has called for vigilance to ensure that this deficit does not run rampant in this election year. The IMF considers it necessary to reduce the fiscal deficit of these countries due to the increase in public debt in emerging countries.
