International Monetary Fund (IMF) Deputy Director Abdel Senhadji has praised Indian government’s efforts to lower debt, saying that the country has relatively high debt to GDP ratio at 70 per cent of the GDP in 2017 but the government is trying to bring it down over the medium term with the right policies.
The IMF official further listed India’s various targets such as federal deficit of three percent over the medium term and a debt ratio of 40 per cent over the medium term at the federal level, which corresponds to about 60 per cent at the general government level. Besides, he said that these targets are appropriate.
On the global front, Director of IMF Fiscal Affairs Department Vitor Gaspar noted that public debt is currently at historic highs in advanced and emerging market economies and average debt-to-GDP ratios, at more than 105 per cent of GDP in advanced economies, are at levels not seen since World War II. He further advised countries to avoid policies that increase economic fluctuations and also suggested to build strong public finances in good times in order to tackle looming risks.