The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, on Wednesday urged prudence from public institutions in the face of global public debt that is “much higher than before the pandemic.”
“We entered the pandemic with high levels of debt and of course after one year and five months, the debt has grown much higher,” pointed out Georgieva who was speaking at a conference organised as part of the IMF and World Bank meetings.
“This is because public revenue has fallen significantly and expenditure has not stopped rising,” he added.
In her speech, Georgieva said that almost 60% of poor countries are in an “emergency” situation regarding debt levels due to the covid-19 pandemic.
In her opinion, the rate of vaccination in these countries is very low which further widens the gap with other countries.
IMF chief economist Gita Gopinath also referred to the debt levels at the press conference where she presented the IMF’s forecast for the global economy.
“Policymakers must continue to support their economies while facing more limited policy space and higher debt levels than before the pandemic,” she warned.
In that regard, the economist said all countries must “adhere to the highest standards of debt transparency” to help contain borrowing costs and reduce debt and rebuild reserves for the future.
