Global Austerity Alert: Looming Budget Cuts in 2021-25 and Alternatives
Map of countries with projected austerity cuts in 2021-2022, in terms of GDP, based on IMF fiscal projections. Credit: I. Ortiz and M. Cummins, 2021By Isabel Ortiz and Matthew CumminsNEW YORK and NAIROBI, Apr 15 2021 (IPS) Last week Ministers of Finance met virtually at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank to discuss policies to tackle the pandemic and socio-economic recovery. But a global study just published by the Initiative for Policy Dialogue at Columbia University, international trade unions and civil society organizations, sounds an alert of an emerging austerity shock: Most governments are imposing budget cuts, precisely at a time when their citizens and economies are in greater need of public support. Analysis of IMF fiscal projections shows that budget cuts are expected in 154 countries this year, and as many as 159 countries in 2022. This means that 6.6 billion people or 85% of the global population will be living under austerity conditions by next year, a trend likely to continue at least until 2025. The high levels of expenditures needed to cope with the pandemic have left governments with growing fiscal deficit and debt. However, rather than exploring financing options to provide direly-needed support for socio-economic recovery, governments—advised by the IMF, the G20 and others—are opting for austerity. The post-pandemic fiscal shock appears to be far more intense than the one that followed the global fi...
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