The International Monetary Fund (IMF) in its latest fiscal monitor update on January 28, 2021 has projected Global public debt to touch 98% of GDP (Gross Domestic Product) at the end of 2020 due to severe challenges imposed to public finances amid COVID-19. It was 84% before COVID-19.
- In this regard, Indian government debt will also be elevated at 83% of GDP.
- The other reasons behind the debt increase are downfall in production, and revenues contraction, which boosted government deficits and debts
- The fiscal monitor was released by Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department
–It also projected that in 2021 the debt will further elevate to almost 100% of GDP in 2021.
–To address this scenario, IMF has provided grants, concessional loans, and debt relief in 2020, including for 38 countries which were at high risk.
–Notably, IMF has provided financing totaling about USD 105 billion to more than 80 countries, of which five are low-income developing countries.
–The maximum lending capacity of the IMF is USD 1 trillion.
Recent Related News:
i.On October 13, 2020, International Monetary Fund (IMF) in its latest World Economic Outlook (WEO-October 2020), titled “A Long and Difficult Ascent” projected India’s gross domestic product (GDP) to contract 10.3% (i.e.-10.3%) in comparison to June forecast of 4.5% amid COVID-19.
ii.On November 12, 2020 As per Moody’s ‘Global Macro Outlook 2021-22: Nascent economic rebound takes hold globally but will remain fragile’, India’s GDP(Gross Domestic Product) for the Calendar Year(CY) 2020 is revised upwards to -8.9%(contract by 8.9) from -9.6% projected earlier.
About International Monetary Fund (IMF):
Member Countries– 190
Headquarter – Washington, D.C., United States
Managing Director– Kristalina Georgieva
Economic Counsellor and Research Department Director– Gita Gopinath