In the latest statement from the IMF, the Covid-19 pandemic is expected to continue to impact global public debt in 2021. However, the institution argues that speeding up vaccinations is the fastest way to recover public spending.
The 2021 fiscal report states that faster global vaccinations could curb the pandemic from continuing to spread and more than $ 1 trillion in additional global tax revenue could be collected by 2025 for developed countries.
If this can be realized global GDP output could increase by $ 9 trillion, coupled with reopening businesses and hiring.IMF and the World Bank recently urged member states to continue to provide fiscal support for citizens and generate economies up to pandemic under control.
The IMF estimates the government has used about $ 16 trillion in pandemic -related fiscal assistance since March 17. In 2021, the IMF expects fiscal deficits to shrink slightly in most countries, jobless claims to decline and opinions to begin to recover as businesses reopen.
The average budget deficit reaches 11.7% of GDP for advanced economies in 2020, four times the increase compared to 2019. On the other hand, public debt worldwide is expected to reach 99% of GDP in 2021, up 2% from 2020.
For example, the IMF recommends that developed economies use more progressive income, estate and property taxes to help reduce economic disparities.
