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IMF’s Gopinath: Debt to GDP levels will stabilize as economy recovers

“Moratoriums on debt payments and debt restructuring may need to be continued during the coronavirus recovery phase,” Gita Gopinath, the International Monetary Fund’ (IMF) chief economist, said on Tuesday. 

Key takeaways

“Debt to GDP levels will stabilize as economy recovers.”

“IMF is projecting a significant increase in debt over next year.”

“Some countries will require aid, debt restructuring.”

“Downside risks prevail in global outlook.”

“Broad-based fiscal stimulus is needed once we are past the pandemic stage.”

“Building up health systems is required to prepare for the next crisis.”

“We are seeing signs of recovery in China.”

“Important for official creditors to provide debt relief to poor countries.”

“Europe debt levels should come down once recovery is underway.”

“Britain has taken an aggressive fiscal approach to coronavirus.”

Market reaction

Markets seem to be paying little to no mind to these comments. As of writing, the S&P 500 futures were up 1.65% on the day.

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