ADVANCED ECONOMY DEFICITS AT POST-PANDEMIC HIGHEST LEVEL

LONDON, OCTOBER 13 /SRNA/ - Growing borrowing needs and higher interest rates are keeping pressure on the public finances of the world's largest economies, with advanced economies expected to run their biggest budget deficits since the pandemic, the Financial Times reported, citing the latest projections from the International Monetary Fund /IMF/.

According to the IMF's World Economic Outlook, net borrowing by advanced economies is expected to reach 5.2 per cent of GDP this year, the highest level since 2021, when pandemic-related lockdowns weighed on the global economy.

The IMF said the outlook had deteriorated since its previous report in April, with deficits in the United States and China expected to reach or exceed eight per cent of GDP this year.

The Fund noted that the projections came after months of turmoil in global debt markets.

"The IMF says rebuilding fiscal buffers is urgent as debt levels are high, borrowing costs are even higher, demands on government budgets are multiplying and uncertainty is rising.

"US figures, which include borrowing by state and local governments as well as federal spending, are considerably higher than those shown in some national statistics," the British newspaper reported.

Despite its fiscal warning, the IMF said the global economy remained resilient to shocks from higher oil prices, supported in part by heavy investment in the development of artificial intelligence.