RISING STATE GOVERNMENT DEBTS ARE A MATTER OF CONCERN
Nantoo Banerjee
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2024-01-08 12:08
There is nothing to panic immediately about India’s current general government debt, for which the International Monetary Fund has warned that it may exceed 100 percent of the country’s gross domestic product (GDP) in the medium term, or by 2028. In its annual ‘Article IV’ consultation report, IMF said that long-term risks are high and stressed the need for “new and preferably concessional sources of financing.” Interestingly, K.V. Subramanian, India’s executive director at the IMF, said: “The risks from sovereign debt are very limited as it is predominantly denominated in domestic currency. Despite the multitude of shocks the global economy has faced in the last two decades, India’s public debt-to-GDP ratio has barely increased from 81 percent in 2005-06 to 84 percent in 2021-22 and back to 81 percent in 2022-23.” The IMF report carries his statement. The IMF visualized the global debt at US$97 trillion in 2023.