Gita Gopinath urges Washington and other advanced economies to reduce their debt
Gita Gopinath, first deputy managing director of the International Monetary Fund has warned the US and other western nations over debt. Photograph: Wang Zhao/AFPThe International Monetary Fund’s second-in-command has urged the US to shrink its mounting fiscal burden, saying strong growth in the world’s largest economy gave it “ample” room to rein in spending and raise taxes.
The warnings come as economists and investors fear that years of fiscal profligacy by both Democrats and Republicans are storing up trouble for the US economy.Datalex report must pave way for company to deal with 18% Desmond loansC&C’s problems don’t go away with McMahon’s departure The IMF said in its benchmark Fiscal Monitor, published in April, that it expected the US to record a fiscal deficit of 7.1 per cent next year – more than three times the 2 per cent average of other advanced economies. It warned that fiscal deficits in both the US and China posed “significant risks” for the world economy.
The IMF’s annual review of the US economy, the so-called Article IV consultation, is due out later this month.Ms Gopinath said that in all advanced economies there was “no way of getting around” the fact that fundamental reforms were needed to pensions systems and medical spending as populations age.
IMF research has found that the technology could endanger 30 per cent of jobs in advanced economies, 20 per cent in emerging markets and 18 per cent in low income countries.“We do think that the generosity of unemployment insurance can be higher in some countries,” she said, adding that wage insurance to cover the gap between workers’ old and new salaries could also work.
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