Global public debt is expected to reach a record US$100 trillion this year, the IMF said yesterday, warning that the fiscal outlook for many countries might be even “worse than expected.”
In its latest report on fiscal policy, the IMF said it expects global public debt to hit 93 percent of global GDP this year, and to approach 100 percent of GDP by 2030 — 10 percentage points higher than in 2019, before the COVID-19 pandemic.
“Global public debt is very high,” IMF Fiscal Affairs Department deputy director Era Dabla-Norris told reporters ahead of the report’s publication.
Photo: Reuters
“There are very good reasons to believe that the debt burden — or the debt outlook — could be worse than expected,” Dabla-Norris said, pointing to spending pressures to address issues such as climate change, overly optimistic debt projections and the possibility of large amounts of unidentified debt.
“So the bottom line is that it’s time for countries to get their fiscal house in order,” she said.
The IMF report introduced a new “debt at risk” approach to assessing the risks to debt projections.
It estimated that, in a worst-case scenario, global public debt could hit 115 percent of GDP by 2026 — almost 20 percentage points higher than the IMF’s baseline estimate.
The report found that “global factors increasingly drive the fluctuations in government borrowing costs across countries,” suggesting that elevated levels of debt in key countries could “increase the volatility of sovereign yields and debt risks” for others.
Moderating inflation and interest rate cuts in many economies meant now was an “opportune” time for countries to rebuild their fiscal buffers, the IMF said, adding that they were “better placed” than before to absorb the effect of fiscal tightening.
The size of the fiscal adjustment needed to bring global public debt back under control was between 3.0 and 4.5 percent of GDP, on average, it said — almost twice the size of past adjustments.
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet (EUV) pod supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is aiming to expand revenue to NT$10 billion (US$304.8 million) this year, as it expects the artificial intelligence (AI) boom to drive demand for wafer delivery pods and pods used in advanced packaging technology. That suggests the firm’s revenue could grow as much as 53 percent this year, after it posted a 28.91 percent increase to NT$6.55 billion last year, exceeding its 20 percent growth target. “We usually set an aggressive target internally to drive further growth. This year, our target is to
The TAIEX ended the Year of the Dragon yesterday up about 30 percent, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The benchmark index closed up 225.40 points, or 0.97 percent, at 23,525.41 on the last trading session of the Year of the Dragon before the Lunar New Year holiday ushers in the Year of the Snake. During the Year of the Dragon, the TAIEX rose 5,429.34 points, the highest ever, while the 30 percent increase in the year was the second-highest behind only a 30.84 percent gain in the Year of the Rat from Jan. 25, 2020, to Feb.
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS