Rich Nations' Debt Has Stabilized, Public Investment Needed-IMF
Public debt in the world's richest nations has stabilized after being nearly halved since the global financial crisis, but remains at historic highs as pressure mounts on governments to spend more in the coming years, the IMF said on Wednesday.
The Fund, which analyzes the economic policies of its 188 member countries, also warned in its twice-yearly Fiscal Monitor report that the world's falling stock of public capital could crimp future economic growth.
Public capital refers to government-owned physical assets such as highways, airports, sewage systems and other infrastructure that contribute to productivity, resulting in economic growth.
The IMF report shows the competing pressures on governments, and the difficulty of fulfilling the Group of 20 nations' pledge in February to lift global output by an extra 2 percent over five years amid already-high debt levels.
The IMF said advanced economies could slow some of their debt-cutting this year to reduce the drag on growth, but they cannot stop entirely, as their debt is likely to stay stuck above 100 percent of national output by 2019.
Emerging markets, however, should also pay more attention to debt and deficit levels, especially because interest rates will rise when advanced nations start to tighten monetary policy.
http://www.nytimes.com/reuters/2014/04/09/business/09reuters-imf-fiscal.html?hp
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