IMF: Governments should use fiscal policies to reduce inflationary pressures

In a blog post published on Monday, the International Monetary Fund (IMF) noted that the total public and private global debt fell to 247% of GDP in 2021 from 257% in 2020, marking the biggest one-year drop in seven decades.

The IMF also said that high inflation will continue to reduce debt levels in 2023 but urged governments to use fiscal policies to reduce inflationary pressures.

Managing high debt levels will become increasingly difficult if the global economic outlook deteriorates further, the IMF further warned.

Market reaction

The US Dollar Index showed no immediate reaction to these remarks and it was last seen trading modestly lower on the day at 104.80.