PFR Fundamental: Budget rigidity published by The World Bank Group (2025)
“Many countries are facing formidable fiscal challenges following a surge in debt-to-GDP ratios in recent years. Estimates of fiscal gaps suggest that sustained fiscal tightening will be needed in most countries to bring debt down to pre-pandemic levels. Moreover, as global financial markets become more unpredictable and interest rates rise, many countries will face significant challenges in maintaining sustainable levels of public debt, especially when this is cou pled with increased public spending due to geopolitical tensions, aging populations, and climate change…”
