The International Monetary Fund (IMF) fears that deficits will deviate at a time when public accounts are not yet healthy. This 2024 is the election year par excellence, in which a record number of countries are called to the polls.
The IMF calls for taxing excessive company profits in corporate tax and addressing reforms to contain spending on healthcare and pensions. It calls for governments to “immediately remove” the legacies of crisis-era fiscal policy, including energy subsidies, and undertake reforms to curb rising spending, while protecting the most vulnerable. It states that advanced economies with aging populations must contain pressures from health care and pension spending through entitlement reforms. The IMF foresees strong imbalances in public accounts in the United States and China, the two largest economies in the world. In Europe, the most worrying fiscal trajectories among large economies are those of France and Italy, with high deficits, low growth, and high debt. In the case of France, it would increase at a rate of almost one percentage point per year from 110.6% in 2023 to 115.2% in 2029. In Italy, the gross public debt would rise from 137.3 Estimated % of 2023 up to 139.2% this year, 140.4% next year, and 144.9% in 2029. Germany, meanwhile, will have its accounts almost balanced and will reduce its debt from 64.3% in 2023 to 57.7% by 2029, according to the Fund, which estimates that debt will fall from 107.5% to 104.2 between 2023 and 2029.