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Cutting Spending Too Soon Could Derail Recovery, IMF Warns

Channels Television  
Updated July 10, 2020
In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP
In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP

 

As governments rushed out funding to prevent an economic collapse amid the coronavirus pandemic, global public debt swelled to the highest in history, but the IMF warned Friday that cutting back too soon could undermine the recovery.

Government spending “will need to remain supportive and flexible until a safe and durable exit from the crisis is secured,” IMF fiscal policy chief Vitor Gaspar and chief economist Gita Gopinath said in a blog post.

The debt figures are staggering — surpassing the size of the global economy, and deficits in advanced economies five times higher than pre-pandemic estimates for 2020.

AFP