The International Monetary Fund called on governments to be cautious as they borrow more money to cushion their economies from the blow of the Covid-19 pandemic.
Public debt is now more than 100 per cent of global gross domestic product and has surpassed the record level it reached at the end of the Second World War, according to Vitor Gaspar, director of the fund’s fiscal affairs department, and Gita Gopinath, chief economist.
“The need for continued fiscal support is clear, but this begs the question of how countries can finance it without debt becoming unsustainable,” the IMF executives said in a blog post.
Fiscal deficits this year are expected to be more than five times higher in advanced economies and probably more than double in emerging market economies.
This is a jump in public debt of 26 percentage and seven percentage points of GDP, respectively, relative to the fund's World Economic Outlook forecasts in January.
Governments will benefit from borrowing costs that are at historical lows and projected to “stay that way for a long time”.
This allows for the continuity of fiscal responses as policymakers look to strengthen health infrastructure, stem job losses, save smaller businesses and stave off larger bankruptcies.
The pandemic, which forced governments to close borders and shut all but essential businesses, has taken a heavy toll on the world's economy, pushing it into its deepest recession since the Great Depression.
In June, the IMF forecast that the world economy would contract by 4.9 per cent this year, down 1.9 percentage points from its April forecast, before staging a sluggish recovery next year to grow by 5.4 per cent.
Two thirds of governments topped up their fiscal support to offset the effects of the pandemic, pumping about $11 trillion (Dh40.4tn) into their economies, compared to $8tn in April.
The fund projects a cumulative loss to the global economy of more than $12tn in 2020 and 2021 as a result of the virus. Although most economies have begun reopening, the rate of infection is still on the rise in the US, Brazil and India.
The virus has infected more than 12.7 million people worldwide and killed more than 567,000, with the US accounting for about 26 per cent of infections worldwide, according to Johns Hopkins University, which is tracking the outbreak.
The IMF executives said while “caution is advised” on public borrowing, “the top priority is still public health”.
“While the trajectory of public debt could drift up further in an adverse scenario, an earlier-than-warranted fiscal retrenchment presents an even greater risk of derailing the recovery, with larger future fiscal costs,” Mr Gaspar and Ms Gopinath said.
The IMF said that global public debt – excluding the US and China – is expected to stabilise next year, spurred by low interest rates and an economic rebound.
Borrowing costs, however, could increase rapidly, particularly for emerging economies and frontier markets, as was the case in March. Countries that entered the crisis with high debt and low economic growth will need to find a way back to sustainable fiscal balances, the fund said.
“The need for fiscal action does not end here, as we are not out of the woods,” Mr Gaspar and Ms Gopinath said.
“Even as many countries tentatively exit the Great Lockdown, in the absence of a solution to the health crisis, huge uncertainties remain about the path of the recovery.”
The fund said the international community must ensure vulnerable developing countries that lack the resources to support healthcare systems are given access to concessional financing and, in some cases, grants.
The IMF has so far extended emergency assistance to more than 70 countries battling the pandemic. The fund said poorer nations may require additional debt relief, including through the G20 debt suspension initiative announced in April.
The programme allows poorer countries to suspend their debt repayments for the remainder of this year to free up funding to fight the virus.
Last month, the G20's International Financial Architecture working group heard that so far 41 countries had applied for the debt relief.
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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The five pillars of Islam
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6pm: Al Maktoum Challenge Round 2 Group 1 (PA) $55,000 (Dirt) 1,900m
6.35pm: Oud Metha Stakes Rated Conditions (TB) $60,000 (D) 1,200m
7.10pm: Jumeirah Classic Listed (TB) $150,000 (Turf) 1,600m
7.45pm: Firebreak Stakes Group 3 (TB) $150,000 (D) 1,600m
8.20pm: Al Maktoum Challenge Round 2 Group 2 (TB) $350,000 (D) 1,900m
8.55pm: Al Bastakiya Trial Conditions (TB) $60,000 (D) 1,900m
9.30pm: Balanchine Group 2 (TB) $180,000 (T) 1,800m
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4pm Al Bastakiya Listed US$300,000 (Dirt) 1,900m
4.35pm Mahab Al Shimaal Group 3 $350,000 (D) 1,200m
5.10pm Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m
5.45pm Burj Nahaar Group 3 $350,000 (D) 1,600m
6.20pm Jebel Hatta Group 1 $400,000 (T) 1,800m
6.55pm Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m
7.30pm Dubai City Of Gold Group 2 $350,000 (T) 2,410m
The National selections:
4pm Zabardast
4.35pm Ibn Malik
5.10pm Space Blues
5.45pm Kimbear
6.20pm Barney Roy
6.55pm Matterhorn
7.30pm Defoe
UAE squad
Humaira Tasneem (c), Chamani Senevirathne (vc), Subha Srinivasan, NIsha Ali, Udeni Kuruppuarachchi, Chaya Mughal, Roopa Nagraj, Esha Oza, Ishani Senevirathne, Heena Hotchandani, Keveesha Kumari, Judith Cleetus, Chavi Bhatt, Namita D’Souza.
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
UAE currency: the story behind the money in your pockets
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
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Gothia Cup 2025
4,872 matches
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Best Men’s Player: Cristiano Ronaldo
Best Partnership of the Year Award by SportBusiness: Manchester City and SAP
Best Referee: Stephanie Frappart
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DUBAI CARNIVAL RESULTS
6.30pm Handicap US$135,000 (Turf) 2,410m
Winner Dubai Future, Harry Bentley (jockey), Saeed bin Suroor (trainer).
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
Winner Dubai Love, Patrick Cosgrave, Saeed bin Suroor.
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
Winner: Equilateral, James Doyle, Charles Hills.
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
Winner Laser Show, Kevin Stott, Saeed bin Suroor.
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
Winner Glorious Journey, James Doyle, Charlie Appleby.
9.25pm Handicap $135,000 (D) 2,000m
Winner George Villiers, Tadhg O’Shea, Satish Seemar.
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Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
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Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
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Cardiff City Stadium, kick-off 11.45pm
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
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