Bloomberg reported that International Monetary Fund (IMF) Managing Director Kristalina Georgieva emphasized in a speech on October 17 that the $100 trillion debt mountain is weighing on the world and that governments must make efforts to reduce debt and rebuild buffers for the next shock that may come sooner than expected.
Several finance ministers received further reminders even before the week ended.
UK finance minister Rachel Reeves faces IMF warning of risk of market backlash if debt becomes unsustainable.
Meanwhile, Moody's Ratings is scheduled to release a report on France, a country under close scrutiny from investors, on October 25.
For the biggest borrowers, the IMF report contains a stark warning: Your public finances are everyone's problem.
“High public debt levels and uncertainty around fiscal policy in systemically important countries, such as China and the United States, could generate significant spillovers in the form of higher borrowing costs and debt-related risks in other economies,” the IMF said.
A rate cut in Canada and a rate hike in Russia are among the possible moves by central banks next week.
Among the eurozone economic reports, the consumer confidence report due on October 23, the purchasing managers' index due the following day and the European Central Bank's (ECB) inflation expectations survey on October 25 could be highlights.
The Russian Central Bank has signaled that persistent inflationary pressures could lead to another interest rate hike, due to be announced on October 25.
In Asia, Chinese lenders, spurred by the People’s Bank of China, are expected to join the campaign to revive business activity by cutting the benchmark lending rate on October 21. The one-year and five-year interest rates are expected to fall 20 basis points to 3.15% and 3.65%.
Data later in the week will show whether the country’s industrial profits rebounded in September after falling more than 17% in August. The latest figures show China’s economy grew at its slowest pace in six quarters in the third quarter of 2024.
