IMF warns of possible sharp global market correction

IMF cảnh báo khả năng thị trường toàn cầu điều chỉnh mạnh

The International Monetary Fund (IMF) has just warned about the possibility of strong adjustments in the global financial market in the coming time, within the framework of the recently published Global Financial Stability Report.

Investors are overly optimistic despite risks such as trade and tariff tensions, geopolitical volatility and rising budget deficits, while high valuations of many assets such as stocks, fueled by a wave of buying in large-cap artificial intelligence stocks, increase the risk of a sharp market correction, according to the IMF.

The IMF advised central banks to be cautious about inflation risks from tariffs and the pace of monetary easing, while calling for fiscal adjustment to contain deficits and ensure robust bond markets.

In addition, Vitor Gaspar, Director of the IMF's Fiscal Department, said global public debt could rise to 123% of GDP by the end of the decade under an "adverse but likely scenario." That's only slightly below the record high of 132% reached just after World War II. Gaspar expressed particular concern about the possibility of a "financial chaos scenario," based on a separate IMF report that warned of the risk of a disorderly market correction that could trigger a fiscal and financial "devastating cycle" similar to the European sovereign debt crisis that began in 2010.

In the context of increasing risks, especially with the escalating US-China trade tensions, Mr. Gaspar emphasized that fiscal reform and debt reduction are urgent. The IMF called on advanced economies as well as developing countries to focus on reducing debt levels, cutting budget deficits and building fiscal buffers to be ready to respond to sudden major economic shocks.

Source: https://vtv.vn/imf-canh-bao-kha-nang-thi-truong-toan-cau-dieu-chinh-manh-100251016163916285.htm