The world’s total public debt is forecast to exceed $100 trillion this year for the first time and could increase more because of higher spending pressures from governments as well as the slowdown in the global economy, according to a new report from the International Monetary Fund.
Global public debt will reach about 93 per cent of global gross domestic product by the end of 2024 and will approach 100 per cent by 2030. This would be up 10 percentage points from 2019, before the coronavirus pandemic boosted government spending to support economic growth.
“Fiscal policy uncertainty has increased, and political red lines on taxation have become more entrenched,” the Washington-based lender said on Tuesday.
“Spending pressures to address green transitions, population ageing, security concerns, and long-standing development challenges are mounting.”
The report comes as the US heads to polls next month to elect a new president. Both the contesting candidates, Donald Trump and Kamala Harris, have promised new tax breaks and welfare policies that could increase spending in the world’s largest economy.
The Committee for a Responsible Federal Budget, which advocates reducing federal deficits, estimates Ms Harris' tax and spending plans would add $3.5 trillion to deficits over 10 years, while Mr Trump's would add $7.5 trillion, according to a Reuters report this month.
Debt-at-risk varies significantly across countries, the IMF said. For advanced economies as a group, three-year-ahead debt-at-risk has declined from pandemic peaks and is estimated at 134 per cent of GDP, whereas for emerging market and developing economies, it has increased to 88 per cent of GDP.
“Differences within and across country groups reflect an initial higher level of debt in advanced economies and large primary deficits in systemically important economies such as China and the US,” the lender said.
The debt out-turns could also be higher than projected due to unidentified debt – the change in debt not explained by interest-growth differentials, budgetary deficits, or exchange rate movements, according to the IMF.
Unidentified debt has historically been large, averaging 1.0 per cent to 1.5 per cent of GDP per year and increasing by up to 7 percentage points of GDP following financial system stress, it said.
The IMF also underlined the importance of rebuilding fiscal buffers to overcome unsustainable debt levels as central banks ease monetary policy and inflation moderates globally.
“Now is an opportune time to rebuild buffers … delaying is costly,” it said.
In countries where debt is projected to increase further – such as Brazil, France, Italy, South Africa, the UK, and the US, “delaying action will make the required (fiscal) adjustment even larger”, the IMF said.
Last month, the US Federal Reserve lowered interest rates by 50 basis points, initiating its first rate-cutting cycle in four years to protect the labour market as inflation slows.
In June, the European Central Bank also cut interest rates for the first time in five years, lowering them from a record high by 25 basis points to 3.75 per cent.
Meanwhile, the IMF report outlined elements needed for fiscal adjustments. These include strengthening fiscal governance and measures to address debt distress.
“Governments need deliberate fiscal plans, framed within credible medium-term fiscal frameworks and modern public financial management systems to anchor their adjustment paths and reduce fiscal policy uncertainty,” the report said.
Countries must also avoid unidentified debt. Assessing contingent liabilities, including those associated with state-owned enterprises, and monitoring them closely are critical, it said.
Strengthening expenditure controls and active cash management can also limit overspending, it added.
For countries facing debt distress or unsustainable debt, “timely and adequate restructuring is needed, along with fiscal adjustments to restore debt sustainability”, the IMF said.
Increasing tax revenue as well as controlling expenditures should also be prioritised.
Emerging markets and developing economies have greater potential to increase tax revenue by upgrading tax systems and broadening tax bases, while advanced economies should reprioritise expenditures and increase revenue through indirect taxes where taxation is low.
Governments should also provide the public with more transparent and timely information on debt, including the composition of creditors and instruments, and exposure to risks as they focus on controlling debt.
Killing of Qassem Suleimani
Zayed Sustainability Prize
The Bio
Name: Lynn Davison
Profession: History teacher at Al Yasmina Academy, Abu Dhabi
Children: She has one son, Casey, 28
Hometown: Pontefract, West Yorkshire in the UK
Favourite book: The Alchemist by Paulo Coelho
Favourite Author: CJ Sansom
Favourite holiday destination: Bali
Favourite food: A Sunday roast
COMPANY%20PROFILE
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Killing of Qassem Suleimani
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
EU Russia
The EU imports 90 per cent of the natural gas used to generate electricity, heat homes and supply industry, with Russia supplying almost 40 per cent of EU gas and a quarter of its oil.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Andor
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The%20specs
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More from Neighbourhood Watch:
If you go:
Getting there:
Flying to Guyana requires first reaching New York with either Emirates or Etihad, then connecting with JetBlue or Caribbean Air at JFK airport. Prices start from around Dh7,000.
Getting around:
Wildlife Worldwide offers a range of Guyana itineraries, such as its small group tour, the 15-day ‘Ultimate Guyana Nature Experience’ which features Georgetown, the Iwokrama Rainforest (one of the world’s four remaining pristine tropical rainforests left in the world), the Amerindian village of Surama and the Rupununi Savannah, known for its giant anteaters and river otters; wildlifeworldwide.com
'Doctor Strange in the Multiverse Of Madness'
Director: Sam Raimi
Cast: Benedict Cumberbatch, Elizabeth Olsen, Chiwetel Ejiofor, Benedict Wong, Xochitl Gomez, Michael Stuhlbarg and Rachel McAdams
Rating: 3/5
Global institutions: BlackRock and KKR
US-based BlackRock is the world's largest asset manager, with $5.98 trillion of assets under management as of the end of last year. The New York firm run by Larry Fink provides investment management services to institutional clients and retail investors including governments, sovereign wealth funds, corporations, banks and charitable foundations around the world, through a variety of investment vehicles.
KKR & Co, or Kohlberg Kravis Roberts, is a global private equity and investment firm with around $195 billion of assets as of the end of last year. The New York-based firm, founded by Henry Kravis and George Roberts, invests in multiple alternative asset classes through direct or fund-to-fund investments with a particular focus on infrastructure, technology, healthcare, real estate and energy.
Abu Dhabi Sustainability Week
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh289,000
Zodi%20%26%20Tehu%3A%20Princes%20Of%20The%20Desert
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
COMPANY%20PROFILE
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'The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure'
Greg Lukianoff and Jonathan Haidt, Penguin Randomhouse
'Gold'
Director:Anthony Hayes
Stars:Zaf Efron, Anthony Hayes
Rating:3/5
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The years Ramadan fell in May
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Contracted list
Ashton Agar, Alex Carey, Pat Cummins, Aaron Finch, Peter Handscomb, Josh Hazlewood, Travis Head, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Mitchell Marsh, Tim Paine, Matt Renshaw, Jhye Richardson, Kane Richardson, Billy Stanlake, Mitchell Starc, Marcus Stoinis, Andrew Tye.
