Budget deficits across the industrialised world will remain sky-high next year in spite of diminished fiscal stimulus, the International Monetary Fund warned yesterday.
The IMF said the UK deficit would rise from 9.8 per cent of gross domestic product this year to 10.9 per cent next, while the deficit in Japan will increase to 9.6 per cent of GDP. It predicted that the US deficit would inch lower, but to a still high 8.8 per cent of GDP.
The new budget forecasts came at the end of three days of meetings in Washington at which world finance ministers welcomed indications that the world economy might be stabilising – but differed in the conclusions they drew from this.
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