World’s $100-T Fiscal Time Bomb Keeps Ticking: Bloomberg

Even before global finance chiefs arrive in Washington over the next few days, they’ve been urged in advance by the International Monetary Fund (IMF) to tighten their belts, Craig Stirling reported for Bloomberg News.

The IMF’s Fiscal Monitor will include a warning that public debt levels are set to reach $100 trillion this year, driven by China and the U.S.

The fund, whose annual meetings begin on Monday, has already highlighted some of the themes it plans to emphasize with projections and studies on the global economy in the coming days.

The IMF’s Fiscal Monitor will include a warning that public debt levels are set to reach $100 trillion this year, driven by China and the U.S. In a speech recently, Managing Director Kristalina Georgieva underscored the burden this mountain of borrowing is placing on the world.

“Our forecasts point to an unforgiving combination of low growth and high debt — a difficult future,” she said.

“Governments must work to reduce debt and rebuild buffers for the next shock — which will surely come, and maybe sooner than we expect.”

Some finance ministers may receive further reminders before the week is over. UK Chancellor of the Exchequer Rachel Reeves has already faced an IMF warning about the risk of a market backlash if debt doesn’t stabilize.

Tuesday will see the release of the final public finance data before her Oct. 30 budget. Insolvency specialists say that the UK tax office is taking a tougher approach to recover debts, aiming to collect £5 billion ($6.5 billion) in additional revenue.