IMF warns high public debt “tremendous” challenge
Strauss-Kahn, managing director of the International Monetary Fund, also said that global economic recovery is still sluggish and uneven and needs continued policy support in many advanced economies.
Growing concerns about the ability of governments to finance the high level of public debt after the financial crisis, particularly in the case of Greece, have been making investors jittery in the past few months.
Strauss-Kahn said public debt in the advanced economies is forecast to rise by about 35 percentage points on average, to about 110 percent of gross domestic product in 2014.
“Reversing this increase will be a tremendous challenge — let alone reducing debt below pre-crisis levels, which may be needed to leave enough fiscal space to tackle future crises,” he told an economic conference at Cambridge University.
“Therefore, for the next decade or two…
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