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Original title: The IMF warns of the risk of abruptly canceling financial support and affirms China’s economic recovery. Source: CCTV News Client
IMF warns risk of hastily canceling financial support affirms China’s economic recovery
According to the latest fiscal monitoring report published by the International Monetary Fund (IMF), affected by the new corona epidemic, as of September 11 of this year,The world has adopted nearly $ 12 trillion of financial support, representing 12% of global GDP during the same period.While relevant financial support can help avoid the large-scale and fundamental negative impact of the new corona epidemic on the global economy, rising public debt also carries certain risks.
Victor Gaspar, director of the Fiscal Affairs Department of the International Monetary Fund, gave a specific explanation on this point in an interview with CCTV reporter Yin Yue in Washington. He also mentioned that China can achieve positive economic growth in 2020, which is remarkable. achievement.
Q:
We spoke in an interview in April that the governments of several countries are increasing financial support to individuals and small and medium-sized businesses to help them overcome difficulties. But obviously, in the last few months we have had some public debt problems, would you call it a problem?
A:
Let’s go back to April, what we saw at that time, you will remember that all the countries of the world are acting with resolution and speed, and the fiscal action is unprecedented. This, as you said, is very important for maintaining people’s livelihoods and business survival, but it also helps to alleviate the negative impact of the new corona epidemic on the economy and employment. what did you say, givenGovernment finances are in deficit,Including the primary fiscal balance, while global economic development is in negative growth,The share of world public debt in GDP has also increased rapidly.Such an increase is unprecedented, but right now, what we (IMF) emphasize isAvoid withdrawing financial support when conditions are immature, because the recovery of economic activities must be supported to avoid long-term fundamental damage to the economic structure.
Q:
Let me talk about China specifically, combined with the chronology of the epidemic in China. The last time we interviewed (April), China had just emerged from its worst epidemic yet. He also mentioned that China is also increasing financial support to ensure the sustainability of the economic recovery.How is China’s public debt situation now? What are the specific risks?
A:
In many important dimensions, China is a very interesting example, I think it needs to be mentioned.China is one of the few countries that can achieve positive growth this year.The certainty of this is growing. In view of the situation at the beginning of the year, this is an achievement worthy of recognition. I don’t think we can be sure in April that China’s recovery can be that successful and powerful.
In China, we have seen a large increase in public debt as a percentage of GDP. This phenomenon is partly due to the fact that the Chinese government’s financial support to the economy is very large in 2020 and 2021. As you mentioned in the first question,China supports the livelihood of China’s people and enterprises as the global model. This support is generous and ongoing.The central government of China is also strengthening its support to local governments, which is a very important way to ensure the functioning of the system in China.
Until the end of our forecast period, which isBefore 2025, China will be one of the few countries in the world whose public debt GDP will continue to increase.I think (China’s) plan is to gradually stabilize or even reduce the share of public debt in GDP after 2025. This is completely reasonable.
What is important is that as the uncertainty caused by the new corona epidemic diminishes,China will be transformed into a future model of sustainable development, which means that social security will be improved and the government will play a more important supporting role in people’s livelihoods.This will cause a change in the growth model, from physical investment to people’s livelihood, from dependence on exports to domestic demand.
【Edit: Chen Haifeng】
