IMF warns higher borrowing costs are straining public finances worldwide
Rising sovereign debt and borrowing costs have prompted a fresh warning from the International Monetary Fund (IMF) about risks to the fiscal health of member countries, with 24-year highs in US Treasury yields expected to become one of the focal topics for central bankers and finance ministers gathering in Bangkok this week. The average yield on 10-year government bonds across the Group of Seven…
The International Monetary Fund (IMF) has warned that higher borrowing costs are straining public finances worldwide, as 10-year government bond yields have reached multi-year highs. This comes as central bankers and finance ministers gather in Bangkok for annual meetings. The IMF's fiscal affairs department chief, Rodrigo Valdes, emphasized the urgency of credible consolidation in the face of rising debt.
High yields could attract capital to advanced economies, potentially increasing funding costs for emerging markets. The IMF expects to release its Fiscal Monitor report, detailing fiscal risks across member economies. In the US, government debt has surpassed $41 trillion, and emerging economies are projected to spend nearly 11% of tax revenue on debt servicing within the next five years, up from 7% between 2011 and 2019.
The global primary deficit, the gap between government revenue and expenses before interest payments, is expected to widen further.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
