France’s public debt at the end of the second quarter of 2024 rose to 112 percent of GDP, up from 110.5 percent at the end of March.
This was reported by the National Institute for Statistics and Economic Research (Insee).
From April to June, the debt increased by €68.9 billion, reaching €3,228.4 billion.
You can learn more about public debt and the economy in the video on the YouTube channel of the Experts Club think tank: https://youtu.be/gq7twYrWuqE
Global public debt may exceed $100 trillion (93% of global GDP) in 2024, according to the Fiscal Monitor report published by the International Monetary Fund (IMF) on Tuesday.
It is expected to continue to grow in the medium term and may rise to 100% of GDP by 2030.
At the same time, under the most unfavorable scenario, global debt could be almost 20 percentage points higher than the baseline forecast and reach 115% of GDP in 2026.
“Debt stabilization (or reduction) is likely to require much more significant fiscal adjustments than currently planned. Now is the right time to restore fiscal buffers, and delaying them is costly,” the report says.
The IMF believes that public debt will continue to grow in countries such as the United States, the United Kingdom, Brazil, France, Italy, and South Africa.
“While debt is projected to stabilize or decline in about two-thirds of countries, it will remain well above levels projected before the pandemic,” the report says. Moreover, the countries that are not expected to stabilize account for more than half of the world’s debt and about two-thirds of global GDP.
Government spending to address the problems of the “green transition” in the energy sector, population aging and security issues is likely to increase fiscal pressure in the coming years, according to the Fund’s experts.
“It’s time for governments to get their act together,” said Era Dabla-Norris, IMF Deputy Director for Fiscal Affairs. – “All countries need a strategic turnaround to reduce debt risks.
For more information about public debt and possible country defaults, please watch the video on the YouTube channel of the Experts Club think tank: https://youtu.be/gq7twYrWuqE?si=0WcmU20F95oeVKZp
Prime Minister of Ukraine Denys Shmyhal has thanked foreign investors for their decision to defer payments on Ukraine’s external debt until 2024.
“Investors in Ukraine’s external debt gave their consent to defer payments until 2024 with a possible extension for another year. Thank you for the step of solidarity. We are also grateful to the G7 countries for supporting this position,” Shmyhal wrote on his Telegram channel on Wednesday.
He said that thanks to this decision, Ukraine will save almost $6 billion on payments over the next two years.
“These funds will help us maintain macro-financial stability, strengthen the stability of the Ukrainian economy and increase the power of our army,” the head of government said.
The prime minister added that the holders of securities of the state-owned Ukrenergo and Ukravtodor also accepted the postponement offer, thanks to which Ukraine could better prepare “for the most difficult heating season in history and more effectively restore infrastructure destroyed by Russian terrorists.”
Ukraine is accurately servicing its public debt, and the International Monetary Fund (IMF) expects that this situation will continue, but they call for supporting the country with grant financing.
“At the moment, Ukraine is servicing its debt in an orderly way. And we would expect that to continue,” IMF spokesman Gerry Rice said at a traditional briefing on Thursday.
Asked about the lack of recommendation to Ukraine to request freezing of payments or something like that, Rice noted that he had no other position than the one stated above.
“We’ve been supporting them with a program loan of $1.4 billion. We’ve supported them from the SDR, the SDR allocation. We’ve established the administered account for donors to support Ukraine. Canada, Germany, the Netherlands have all stepped in so far. We are expecting more in the coming days,” he said.
“What we see as the priority in terms of financing for Ukraine right now is grant financing. In in the short term that’s the best form of assistance that can be provided by the international community in light of the war situation and the nature of the shock. And that would allow the Ukrainian government to remain operational without incurring further debt,” he added.
The Ministry of Finance of Ukraine in March raised the forecast for payments on public debt in 2022 by UAH 4.93 billion compared to the March forecast – up to UAH 572.26 billion, according to the forecast for April on the agency’s website.
According to him, the largest amount of payments falls on April-June of this year – UAH 167 billion, while in August-September it is projected at the level of UAH 145.32 billion, in October-December – UAH 124.63 billion.
The Ministry of Finance estimates payments on domestic debt in 2022 at UAH 440.95 billion, and on external debt at UAH 131.32 billion.
According to the Ministry of Finance, on a monthly basis, the largest amount of payments fell on February – UAH 75.78 billion, and May – UAH 69.59 billion.
At the same time, the ministry increased the forecast of payments on public debt in 2023 by UAH 25.71 billion to UAH 400.91 billion.
In 2024, the ministry expects a payment in the amount of UAH 348.74 billion.
The volume of public debt of all countries of the world in 2022 will increase by 9.5% and reach a record high of $71.6 trillion, according to the Sovereign Debt Index study by the British management company Janus Henderson.
In 2021, global public debt rose by 7.8% to $65.4 trillion, with an increase in borrowing observed in all countries covered in the study.
In the meantime, the total cost of servicing the debt has fallen to $1.01 trillion, that is, the actual rate was only 1.6%, according to CNBC research.
In 2022, global public debt service spending is expected to jump 14.5% to $1.16 trillion.
Analysts Janus Henderson believe that the UK will face higher borrowing costs than other countries due to higher interest rates of the Bank of England and a significant amount of government debt with floating rates tied to inflation. Domestic consumer prices jumped 6.2% year-on-year in February, the fastest pace since March 1992.
European countries will also actively place government bonds due to the need to sharply increase government spending on defense in light of the military events in Ukraine, said Bethany Payne, portfolio manager at the company.
