IMF report: Govt allays fear over debt – Times of India

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NEW DELHI: The finance ministry on Friday said any interpretation of the IMF report would indicate that the general government debt would exceed 100 per cent. GDP Misunderstood in the medium term.
“Under various favorable and unfavorable conditions given by the IMF, under an extreme probability, such as once in a century COVID-19, it has been reported that general government debt could be “100% debt to GDP ratio” under adverse shocks by fiscal year 2028. It only speaks of a worst-case scenario and it is not true,” the ministry said in response to the reports. The IMF expressed concern over the country’s debt levels based on its Article IV report. Under Article IV of the FK Agreement, the IMF holds bilateral discussions with members, usually annually, and acts as a health check on the economies and policies pursued by the respective governments. is going.

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The Ministry pointed out that India’s general government debt is over Rs 100 crore, with external borrowings (from bilateral and multilateral sources) contributing the least and highlighted in the IMF report. Is.
It also states that domestically issued debt, mostly in the form of government bonds, is mostly medium or long-term with a weighted average maturity of around 12 years for central government debt. “Therefore, the rollover risk for domestic debt is low, and the exchange rate tends to fluctuate less,” the finance ministry statement said.
It also said that similar IMF reports for other countries show very high scenarios for them. The corresponding ‘worst case’ figures for the US, UK and China are around 160%, 140% and 200% respectively, much worse than 100% for India.
“It is also noteworthy that the same report indicates that under favorable circumstances, general government debt as a proportion of GDP could fall below 70 percent over the same period,” according to a finance ministry statement. It says that the shocks to India this century were global in nature, including the global financial crisis, the taper tantrum, Covid, Russia-Ukraine Waramong others these shocks affected equally. Global Economics And hardly a few countries have not been affected by it. Therefore, any negative global shock or extreme event is expected to unilaterally affect all economies in an interconnected and globalized world.

Business news,United Kingdom,Russia-Ukraine War,The IMF,Global Economics,GDP,COVID-19

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