Rodrigo Valdes, Director of the IMF's Fiscal Affairs Department, says governments in almost all economies face pressing fiscal challenges from high debt, higher interest rates and rising spending demands. The IMF's Fiscal Monitor projects global public debt to exceed 100% of global GDP before 2030, with real interest rates on government debt still above pre-pandemic levels. Valdes cites defense spending in Europe and the US, population aging that raises healthcare and pension costs, and climate investment needs as added pressures. Governments have so far provided subsidies or tax cuts averaging around 0.5% of GDP to contain oil prices, and he urges measures that are targeted, temporary and transparent. He also says China is less vulnerable than countries with comparable debt levels, citing its liquid assets, low interest rates and high savings rate.
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