According to forecasts by the International Monetary Fund (IMF), President Donald Trump's policies of widespread tax cuts and increased defense spending are on track to push the US public debt past both Italy and Greece by the end of this decade.
The IMF forecasts that while Italy and Greece are struggling to control spending after the 2008 financial crisis and the COVID-19 pandemic, US public debt will rise from the equivalent of 125% of Gross Domestic Product (GDP) to 143% of GDP by 2030. At the same time, Italy's debt-to-GDP ratio will remain stable at around 137%. During the same period, Greece is also on track to reduce its debt-to-GDP ratio from 146% to 130%. According to IMF data, Greece has addressed its budget deficit, which had soared to 210% of GDP in 2020.
According to an analysis in the Financial Times, the US is projected to face an annual budget deficit of more than 7% of GDP over the next five years following tax cuts for the wealthy. In contrast, Italy is on track to reduce its deficit to 2.9% of GDP this year, helping it achieve the European Union's (EU) target of 3% of GDP a year ahead of schedule.
The Trump administration simultaneously increased public spending and cut federal taxes through a “big and beautiful bill.” This policy forced the White House to increase borrowing to cover annual expenditures. President Trump completely reversed the efforts of the previous administration under former President Joe Biden to curb the budget deficit, which implemented tax cuts that primarily benefited the middle and upper classes.
In addition, he also pledged to spend nearly $1 trillion to build a defensive shield he called the "Golden Dome." Such increased spending could push the US budget deficit up by an additional $7 trillion per year by the time Trump is expected to leave office in January 2029.
Meanwhile, both Italy and Greece have committed to maintaining primary budget surpluses, a policy that requires cutting spending to below tax revenue levels.
Speaking to the Financial Times, Mahmood Pradhan, head of global macro at the Amundi Investment Institute, cited forecasts from the Congressional Budget Office indicating that US debt will continue to rise, explaining this as an inevitable consequence of persistent budget deficits. However, Pradhan also emphasized that Italy's economic growth prospects are weaker than those of the US, so it should not be premature to conclude that Italy has completely emerged from its difficult period.
Source: https://vtv.vn/imf-no-cong-cua-my-sap-vuot-ca-italy-va-hy-lap-100251028163619689.htm
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