WASHINGTON (Reuters) – The International Monetary Fund (IMF) urged countries on Wednesday to rein in fiscal spending, while acknowledging that doing so could prove difficult in an election-filled 2024.
A record 88 countries, home to more than half the world’s population, have held or will hold national elections in 2024, the IMF noted, indicating that governments tend to spend more and tax less during election periods.
The United States will hold its presidential election in November, while Indian voters will start casting their ballots this Friday. Taiwan, Portugal, Russia and Turkey have already held elections, and the same will be true of the Twenty-Seven for the European Parliament elections in June.
The IMF said budget overruns were often likely in election years, a risk amplified by increased demand for social spending.
According to the IMF, deficits in election years tend to exceed forecasts by 0.4 percentage points of GDP, compared to non-election years.
“Governments should immediately begin phasing out legacies of crisis-era fiscal policy (related to the COVID-19 pandemic), including energy subsidies, and pursue reforms to curb increased spending while protecting the most vulnerable,” estimated the IMF.
The IMF said on Tuesday that the global economy is expected to experience another year of slow but steady growth, forecasting global real GDP growth of 3.2% for 2024.
While the global economic outlook has improved over the past six months, many countries still struggle with high debt and budget deficits, record interest rates and darkening medium-term growth prospects. , he warned.
(Report Andrea Shalal; Diana Mandiá)
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