Top economies heading for biggest budget deficits since Covid, IMF warns
At its annual meeting, the fund calls for ‘urgent’ action to rebuild public finances
Source: Financial Times
―
DW NOTE
The IMF spent 2020–2021 urging governments to spend without limit because rates were low and inflation was "transitory." Now rates are anything but low, inflation is structural, and the same institution calls the resulting deficits urgent. The fund is diagnosing a disease it helped spread. With 10-year Treasuries at 5.22% and the US deficit running 4% higher than last year, rebuilding public finances means either cutting spending that has become politically entrenched or refinancing legacy debt at rates that make the arithmetic worse.