IMF Urges Fiscal Caution as Global Debt Surges to Record (1)

The International Monetary Fund urged governments to exercise fiscal caution as they borrow more to support economies hit by the Covid-19 pandemic, saying debt levels could soar to a record this year.

“The need for continued fiscal support is clear, but this begs the question of how countries can finance it without debt becoming unsustainable,” Fiscal Affairs Department Director Vitor Gaspar and Gita Gopinath, the fund’s chief economist, said in a blog Friday.

While governments will benefit from record-low borrowing costs that are set to stay that way “for a long time,” their collective fiscal response of about $11 ...