Capital Economy, Business and Finance
Global public debt is expected to exceed $100 trillion by the end of this year, says the IMF. One reason is the record number of elections: Goldman Sachs analysed 152 countries to show that deficits exceed forecasts by 0.4 per cent on average during an election year, as governments turn on the spending taps and tax less. Covid is another, with the global debt-to-GDP ratio 10 per cent higher than on the eve of the pandemic. The IMF says now is the “opportune” moment to tackle rising debt risk as inflation recedes and central banks cut rates. Politicians have other ideas. In the US, campaign promises being made by Trump and Harris are forecast to swell federal debt by $7.5 trillion and $3.5 trillion respectively over the next decade. Bond markets in the UK and France are jittery as concerns persist that new governments will keep debt high.
