IMF: ‘Timely’ action needed to tackle debt

A report by the International Monetary Fund (IMF) stresses the need for developed countries to tighten their fiscal policies:

“Fiscal policy will need to react more strongly to debt than past behaviour would suggest, and governments will need to engage in reforms that place debt on a sustainable footing.

“In the last three and a half decades, public debt has been the shock absorber in advanced economies – going up in bad times and not coming down in good times.

“Timely policy measures are needed to increase the probability that public debt will remain on a sustainable path and convince markets that fiscal policy is not proceeding on a ‘business as usual’ basis.”