IMF Warns Of Soaring Global Debt, Calls For Private Sector Investment

(MENAFN- Trend News Agency) BAKU, Azerbaijan, January 22. Public sector debt is $100 trillion now, and it is projected to reach 100% of world GDP by the end of this decade, said Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF), as she addressed the World Economic Forum session on Emerging Economies amid Shock, Trend reports.

Gopinath cautioned against complacency, noting that debt levels typically exceed forecasts by about 10 percentage points, which means the outlook could be even more concerning.“There is an optimism bias in these forecasts,” she remarked, stressing that nations must address this growing issue.

Turning to productivity growth, Gopinath observed that while the United States stands as an exception, most other regions have seen disappointing productivity outcomes since the pandemic, including Europe, China, and much of the developing world.“This is not about whether they are able to adopt new technologies and AI,” she said, adding that all countries face challenges in integrating these advancements into their economies.

A key concern, according to Gopinath, is the significant investment needed to address global challenges, including climate change and digital transformation. She emphasized the critical role of the private sector in driving this investment.“80 to 90% of the climate finance will have to come from the private sector,” she said, urging countries to foster ecosystems that encourage such investments.

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