Donald Trump’s tariff plans have increased the risks to public finances, the International Monetary Fund (IMF) said on Wednesday, April 23rd, warning countries to get their spending plans under control and prepare for “sharper” trade-offs.
The U.S. president’s on-again, off-again introduction of levies against top trading partners has sent market volatility soaring and unnerved investors.
Under its new projections, the IMF expects global general government debt to rise to more than 95% of economic output this year, and to approach 100% of GDP by 2030.
In the forecasts, the IMF expects public debt to rise by about the same amount as the combined increases seen in 2023 and 2024.
The IMF expects that more than a third of the world’s economies, who collectively account for 75% of global GDP, will see a rise in indebtedness this year.
This includes many of the world’s largest economies, including the United States, China, Germany, Britain, and France.
The projections for France and Germany suggest that neither country will be able to reduce their budget deficits to levels generally considered sustainable by the end of the decade.
