Thank the bond vigilantes – they’re doing what politicians won’t
Singapore President Tharman and IMF chief Georgieva warn that some of the world’s biggest economies face a fiscal reckoning no one can bail them out of. Bond market pressures are exerting a reality check.
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President Tharman Shanmugaratnam and IMF managing director Kristalina Georgieva after their fireside chat at the Lee Kuan Yew School of Public Policy on Oct 7.
ST PHOTO: JASON QUAH
Last week, in the run-up to the annual meetings of the International Monetary Fund and the World Bank, which started in Bangkok on Oct 12, President Tharman Shanmugaratnam had a candid fireside chat with IMF managing director Kristalina Georgieva on some of the most urgent issues facing the world economy. One of the highlights was their focus on fiscal policy and debt.
Georgieva pointed out that global public debt is near its highest levels in the post-World War II era and is on track to soon exceed 100% of gross domestic product (GDP). Large economies such as the US, Japan, France and Britain are among its key drivers.