IMF forecasts reduction in public debt to 94.4% of GDP this year

 In Economy, Growth, IMF, News

According to the IMF’s Fiscal Monitor published on Tuesday, public debt will fall to 94.4% this year and 89.8% next year, which compares with forecasts of a ratio of 95.9% of GDP this year and 93.3% next year included in the State Budget proposal for 2025.

The IMF also estimates that Portugal’s accumulated debt will continue its downward trajectory to 76.2% by 2029, which are more optimistic than those of the government.

According to the Fiscal Monitor published today, public debt will fall to 94.4% this year and 89.8% next year, which compares with projections of a ratio of 95.9% of GDP this year and 93.3% next year included in the State Budget proposal for 2025.

For the coming years, the IMF believes in a downward trajectory of debt to 86.2% in 2026, 82.8% in 2027, 79.4% in 2028 and 76.2% in 2029.

It should be noted that the “projections for the current year are based on the budget approved by the authorities, adjusted to reflect the macroeconomic forecasts of the IMF staff”. The later projections, on the other hand, “are based on the assumption of unchanged policies”.

This report warns of the increase in world debt, which could exceed US$100 trillion this year, with the IMF, through Vítor Gaspar, director of its Department of Fiscal Affairs, calling on governments “to act is now”.