IMF warns rise in government debt could be sharper than first thought

Global public debt is set to reach $100tn, or 93% of global gross domestic product (GDP), by the end of this year, driven by the U.S. and China, according to the IMF’s latest Fiscal Monitor report. Debt is tipped to increase in the U.S., Brazil, France, Italy, South Africa and U.K., according to the IMF report, which urges governments to rein in debt. “It’s time for governments to get their house in order,” said Era Dabla-Norris, deputy director for fiscal affairs at the IMF. “For all countries, a strategic pivot is needed to reduce debt risks.” U.S. government debt could reach 150% of the country’s GDP. According to the IMF’s calculations, U.S. government debt started the century at less than 60% of GDP, a proportion that has more than doubled already. According to the Fund, there is scope to increase tax revenues in both the U.S. and the U.K., where they are at a relatively low level as a proportion of economic output compared to rich-country peers. In the U.S., the IMF sees room to raise revenues from sales taxes, as well as taxes on higher incomes.