By Aysu Bicer
ANKARA (AA) - Global public debt is projected to see 94.4% of the world's gross domestic product in 2022, down 2.6 percentage points compared to last year, according to a latest IMF report.
However, the report, titled Fiscal Policy from Pandemic to War, said that Russia’s war in Ukraine creates “elevated uncertainty” for fiscal outlook as the war and spillover effects from sanctions on Russia are still unknown.
"There are large risks around the outlook for deficits and debt, especially if economic growth disappoints or inflation dynamics continue to surprise," it said.
Public debt among low-income developing countries is also expected to gradually decline to 48% of GDP by 2024, while debt in advanced economies is estimated to decrease to 113% of GDP by 2024.
"High uncertainty and marked divergences across countries require a tailored and agile fiscal policy response. To support economies that will be hardest hit by the war, fiscal policy will need to address the humanitarian crisis and economic disruption," it said.
The IMF noted that due to rising inflation and interest rates, fiscal support should target those that are most affected and focus on priority areas.