Sam Fleming, Amy Kazmin and Claire Jones:
The US government’s debt burden is on track to exceed levels in both Italy and Greece for the first time this century, according to IMF forecasts, underscoring the parlous state of America’s public finances.
General government gross debt in the US will rise by more than 20 percentage points from now to reach 143.4 per cent of the country’s GDP by the final year of the decade, IMF forecasts show, exceeding previous records set after the pandemic.
That comes as the IMF estimates that the US budget deficit will hover above 7 per cent of GDP every year until 2030 — the highest of any rich nation tracked by the fund for this year and the rest of the decade.
Italy and Greece have long been highlighted by economists for their fragile public finances. Both countries were at the heart of the euro area sovereign debt crisis of 2010-2012, with Greece requiring a bailout and restructuring overseen by the IMF and EU.
But government debt burdens in both European countries are projected to be on a downward trajectory at the end of the decade as they keep a tight grip on their budget deficits.
By contrast, the US debt-to-GDP ratio will still be rising in 2030, according to the IMF data released this month, with the Congressional Budget Office expecting it to increase for decades thereafter.