World Economic Forum experts warn of rapid rise in public debt levels
Date
1/26/2025 2:40:17 AM
(MENAFN) Experts at the World Economic Forum in Davos, Switzerland, raised alarms on Thursday about the rapid rise in public debt levels, which are becoming increasingly unsustainable as governments face the challenge of repaying this debt at soaring interest rates.
International Monetary Fund (IMF) Deputy Chief Gita Gopinath called for a drastic change in approach, stating that the current situation cannot be treated as "business as usual." She emphasized that projections for the growth of debt levels had been overly optimistic, underestimating the severity of the problem.
Gopinath highlighted that the global public debt has now reached approximately USD100 trillion, and the situation is exacerbated by the rising cost of servicing this debt due to increasing interest rates. UN Trade and Development Secretary-General Rebecca Grynspan pointed out that 3.3 billion people live in countries where governments are spending more on servicing their debts than on crucial sectors like education and healthcare. This imbalance is further compounded by the fact that any economic growth achieved under these conditions is unlikely to be sustainable.
David Schwimmer, CEO of the London Stock Exchange Group, also expressed concern about political leaders’ reluctance to address the growing public debt crisis. He noted that there was a significant missed opportunity after the coronavirus pandemic when governments could have used the situation to highlight the long-term downsides of heavy spending aimed at maintaining stability during the health crisis.
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