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Saudis Name the Main Risk to the Global Economy in 2025

National debt poses a serious threat to markets in the near future, said the Minister of Finance of Saudi Arabia, expressing particular concern about low-income countries and rapidly increasing global fragmentation, CNBC reports.

“I think that on a global scale, a serious problem we need to consider is the issue of sovereign debt, especially in low-income countries and emerging economies that do not have fiscal buffers to counter market disruptions,” Mohammed Al-Jadaan told CNBC in a conversation with Dan Murphy at the Future Investment Initiative forum in Riyadh on Wednesday.

“And hopefully, with the help of the IMF and the G20, we will find a solution and be ready to support the global economy in case of shocks in this area. But this is an area we need to monitor as global leaders so that it doesn’t catch us by surprise.”

Al-Jadaan earlier emphasized the importance of achieving a soft landing for economies as central banks attempt to manage inflation.

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“We returned from Washington two days ago, after a week of meetings at the IMF, the World Bank, and the G20, and I think there is clear recognition that the world actually looks resilient,” he said. “There is a lot of discussion around managing a soft landing, which is very important. The key challenge is sovereign debt, and much discussion was devoted to having the three institutions work together to try to find a solution for sovereign debt, especially in low-income countries.”

Global public debt reached a record $97 trillion in 2023, prompting the UN to call for urgent reforms for governments and financial systems worldwide.

Earlier this month, the IMF warned that the combined volume of sovereign debt worldwide would exceed $100 trillion for the first time this year and could grow faster than anticipated.

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