The IMF warned of possible damage to the EU economy due to the growth of public debt.

The International Monetary Fund (IMF) has warned the European Union (EU) that an increase in public debt in European countries could negatively affect the economy and slow down its development. This was reported on May 23 by the Politico newspaper with reference to an IMF document submitted to EU finance ministers.

“The trajectory of the growth of the EU’s public debt may become explosive, which will damage the bloc’s economy if measures are not taken to combat fiscal pressure,” the publication says.

It is noted that without taking measures, public debt may enter an unstable trajectory, and if the current policy course is maintained, by 2040 it may grow to about 130% of GDP on average in Europe, which is almost twice as high as current figures.

In addition, the IMF clarified that in the next 15 years, EU governments may face increasing pressure on budget spending, in particular in the areas of defense, energy and pensions.

The Politico newspaper reported on May 21 that Brussels lowered forecasts for economic growth in the European Union by 0.3% due to a sharp increase in energy prices after the blocking of the Strait of Hormuz. It was clarified that the EU authorities expect that the conflict in the Middle East will lead to an increase in inflation and public debts of member states throughout the bloc, so the projected growth rate of the EU economy in 2026 was reduced from 1.4% to 1.1%.

Source: en.iz.ru