IMF Weekend Read

 

Dear MARIA,   In today's edition, we highlight: Global Debt Remains Above 235% of World GDP Italy Needs Higher Productivity and More People Working 2025 Michel Camdessus Central Banking Lecture The Battle for Control Could Crush AI's Promise Podcast: Danny Quah on Rethinking Multilateralism PUBLIC DEBT Global Debt Remains Above 235% of World GDP (Credit: Alberto Marrupe Gutierrez/iStock by Getty Image) Global debt has stabilized, though it remains elevated at just above 235 percent of GDP, according to the latest update of the IMF’s Global Debt Database.   But there’s a growing divide between public and private borrowing. Private debt has dropped to under 143 percent of GDP - its lowest point since 2015 - mainly due to lower household liabilities. Public debt, on the other hand, rose to nearly 93 percent, driven by persistent fiscal deficits and Covid-19-related spending.   Debt trends vary across regions: government debt rose in the US and China but fell in several other advanced economies. Private debt also shows mixed patterns, with declines in the US contrasting with increases in China and some emerging markets.   The findings emphasize the need for balanced fiscal strategies that reduce public debt without stifling private investment, alongside policies that foster economic growth and stability.  Read the Blog COUNTRY FOCUS Italy Needs Higher Productivity and More People Working (Credit: ewg3D-Audrius Venclova-cabuscaa-iStock by Getty Image) Italy’s economy has remained relatively resilient despite global economic uncertainty, and its public finances turned out better than expected last year, recording a primary surplus of 0.4 percent of GDP. Nonetheless, trade tensions have added to risks, not least because Italy is a large exporting economy.   Longer-term growth in the European Union’s third-largest economy is constrained by low productivity, a shortage of highly skilled professionals, and an aging and declining population, Italy’s mission chief, Lone Christiansen, told IMF Country Focus. Read the Article CENTRAL BANKING 2025 Michel Camdessus Central Banking Lecture Chang Yong Rhee, Governor of the Bank of Korea, gave the IMF’s twelfth Michel Camdessus Central Banking Lecture this week at Fund headquarters in Washington.   The lecture focused on the IMF's Integrated Policy Framework, which gives policymakers much-needed guidance on how best to deploy an expanded toolkit—when needed—to help manage shocks, strengthen resilience, and reinforce credibility. These IPF tools include foreign exchange interventions, macroprudential policy measures, and capital-flow management measures.    The lecture was followed by a conversation between the Governor and IMF Managing Director Kristalina Georgieva.  Watch the Video F&D MAGAZINE The Battle for Control Could Crush AI’s Promise (Credit: Brian Stauffer) In the mid-20th century, the Soviet Union’s technological successes, notably launching Sputnik and sending Yuri Gagarin into space, convinced many observers that centrally planned economies might outperform market-driven ones. Yet, paradoxically, the USSR collapsed just as the computer revolution took off.   Despite considerable investments, the USSR failed to harness the promise of computing technology, Oxford University’s Carl Benedikt Frey writes in F&D. The obstacle was not a shortage of scientific talent, but institutions inhospitable to exploration. Whereas Silicon Valley thrived on decentralized experimentation, innovation in Zelenograd was centrally controlled and orchestrated entirely by Moscow government officials, he says.   “Sustaining a policy regime that safeguards the competitive arena itself, rather than the fortunes of particular firms, is essential if the next generation of transformative innovators is to deliver the promised boost to productivity,” Frey writes. “That’s as true for the AI age as it was for the computer era.” Read More PODCAST Danny Quah on Rethinking Multilateralism   (Credit: IMF Photo) Bringing nations together to maintain peace and security and raise living standards for all seemed a utopian idea in the early 20th century. Still, geopolitics, economics and vision by world leaders eventually came together to make it a reality. But what happens when the great powers that have been supporting the multilateral system decide it’s not working for them anymore?    Danny Quah has studied the increase in global economic tensions and sees the rising East as an important factor. Quah is the Li Ka Shing Professor of Economics at the National University of Singapore. In this podcast, he says that while economics and geopolitics worked together to build the multilateral rules-based system, they are now working together to break it apart. Listen to the Podcast Weekly Roundup CAPACITY DEVELOPMENT Macroframework Foundations Tool (MFT) 1.0: User Manual This User Manual discusses the operational aspects of the Macroframework Foundations Tool (MFT), a multi-sector macroeconomic framework for forecasting and policy analysis developed by the IMF Institute for Capacity Development (ICD). The MFT is a simple but powerful tool to produce consistent macroeconomic projections from accounting and economic perspectives, and it could be extended to incorporate a longer projection horizon, greater sectoral details, and different policy environment.  Want to keep up with the latest from the IMF? Subscribe to our WhatsApp Channel for the latest economic data, expert perspectives, economic trends, and more. Subscribe now and stay informed! Click here to join our WhatsApp channel. Thank you very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.     Noha Elbadawy  Editor | IMF Weekend Read   NElbadawy@imf.org Stay connected with the International Monetary Fund:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431