WASHINGTON, April 15 (Xinhua) -- Global debt is estimated to increase by 13 percentage points to reach 96.4 percent of gross domestic product (GDP) in 2020, as the COVID-19 pandemic leads to higher spending and plunging revenues, the International Monetary Fund (IMF) said Wednesday.
The pandemic and the associated lockdowns have led to increases in debt and deficits beyond those recorded during the global financial crisis, Vitor Gaspar, director of the IMF's fiscal affairs department, said at a virtual press conference on the newly released biannual Fiscal Monitor.
"The increase in debt is a necessary consequence of the fiscal actions taken to fight the pandemic," Gaspar told Xinhua in a recent written interview. "As the pandemic abates and the economy recovers, hopefully in 2021, public debt ratios should stabilize again, albeit at higher levels."
The IMF official encouraged policymakers to "do whatever it takes" in times of emergency but "make sure to keep the receipts."
He noted that countries have taken fiscal actions amounting to about 8 trillion U.S. dollars so far to contain the pandemic and its damage to the economy, with Group of 20 (G20) countries taking the lead.
In the new World Economic Outlook (WEO) report released Tuesday, the IMF projected that the global economy is on track to contract by 3 percent in 2020 as a result of the COVID-19 pandemic, calling it the worse recession since the Great Depression in the 1930s.