INSUBCONTINENT EXCLUSIVE:
Global public debt is projected to edge up from 98 per cent of GDP in 2020 to 100 per cent of GDP in 2021Global public debt is estimated to
touch 98 per cent of GDP at the end of 2020, International Monetary Fund (IMF) said on Thursday in its latest fiscal monitor update,
The COVID-19 pandemic has posed a severe challenge to public finances, the report said noting that the contraction in output and ensuing
fall in revenues, along with emergency lifelines, boosted government deficits and debts beyond levels recorded during the global financial
crisis.Vitor Gaspar, Director of the IMF's Fiscal Affairs Department told reporters that the government revenue declined everywhere, public
debt jumped up to 98 per cent compared with 84 per cent before COVID-19
"From 2021 onwards debt stabilizes at the high level, and stays elevated well above pre-COVID-19 levels up to the end of the forecasting
highlighting the need for a credible medium-term fiscal framework to enhance confidence, anchored on revised fiscal objectives and revenue
the pandemic still out of control and economies growing below potential, additional fiscal support will be necessary in 2021, to protect
livelihoods."High public debt need not raise immediate concerns on debt sustainability, but highly indebted emerging markets and developing
economies could find it challenging to borrow more
Overall, the prospects for market financing are good, but near-term debt vulnerabilities remain high in some developing countries," he said
has provided grants, concessional loans, and debt relief in 2020, including for 38 countries assessed to be "at high risk."Fiscal adjustment
and, in a few cases, debt restructurings are expected to contribute to debt reduction
Nearly everywhere, credible medium-term strategies need to be developed, with the objective of stabilizing and gradually bringing debt to
safer levels over time, supported by pro-growth and inclusive measures, he said.Gasper said that low-income developing countries urgently
need funding for social services, health and education, COVID-19 control measures, and support for food programs in countries that face the
The IMF, he said, is helping and remains committed to providing further support
low-income developing countries
grants, concessional lending, and debt relief
That includes the debt service suspension initiative, but on a case-by-case basis, deeper debt treatments may be called for, including
restructuring, Gasper said.Asserting that the international community should act together to foster inclusive growth, Gasper called for
universal availability of effective vaccines
"Health should come first, and lifeline should be targeted as needed
COVID-19 will not be under control anywhere until it is under control everywhere
The sooner that happens, the sooner economic activity will pick up, the sooner jobs will come back," Gaspar told reporters."Making effective
vaccines universally available is the priority number one, Lifeline should be targeted to the most vulnerable and kept as appropriate in
response to developments in virus propagation," he said
Releasing the annual fiscal monitor update, Gasper called for facilitating the transition to a smart, green, resilient and inclusive growth
"This applies to support today, and becomes even more important as the recovery takes hold," he said.
