IMF: US public debt is about to surpass both Italy and Greece

VTV.vn - The IMF forecasts that US public debt will surpass Italy and Greece by 2030, due to tax cuts and increased defense spending under President Donald Trump.

President Donald Trump's sweeping tax cuts and increased defense spending are on track to push US public debt above that of Italy and Greece by the end of the decade, according to forecasts from the International Monetary Fund (IMF).

The IMF predicts that while Italy and Greece are struggling to control spending after the 2008 financial crisis and the COVID-19 pandemic, US public debt will increase from 125% of GDP to 143% of GDP by 2030. Italy's will remain flat at around 137% of GDP over the same period. Greece is also on track to cut its debt-to-GDP ratio from 146% to 130%. According to IMF data, Greece has tackled its budget deficit, which soared to 210% of GDP in 2020.

The US is expected to run an annual budget deficit of more than 7% of GDP over the next five years after tax cuts for the wealthy, according to an analysis in the Financial Times. By contrast, Italy is on track to reduce its deficit to 2.9% of GDP this year, helping it reach the EU's 3% GDP target a year ahead of schedule.

The Trump administration has increased government spending and cut federal taxes through the “big, beautiful bill,” forcing the White House to borrow more to pay for its annual spending. President Trump has reversed the previous administration’s efforts to contain the budget deficit under former President Joe Biden, introducing tax cuts that mainly benefited the middle and upper classes.

He has also pledged to spend nearly $1 trillion to build a defense shield he calls the “Golden Dome.” Such spending increases could push the U.S. budget deficit up by $7 trillion a year by the time Trump leaves office in January 2029.

Meanwhile, both Italy and Greece have pledged to maintain primary budget surpluses, a policy that requires cutting spending below tax revenues.

Speaking to the Financial Times, Mahmood Pradhan, head of global macro at Amundi Investment Institute, cited forecasts from the Congressional Budget Office that US debt will continue to rise, explaining that this is an inevitable consequence of the persistent budget deficit. However, Mr. Pradhan also emphasized that Italy's economic growth prospects are weaker than the US, so it should not be hasty to conclude that Italy is completely out of the woods.

Source: https://vtv.vn/imf-no-cong-cua-my-sap-vuot-ca-italy-va-hy-lap-100251028163619689.htm