IMF Urges Nations to Cut Debt Casting ‘Shadows’ on World Economy

The International Monetary Fund urged nations to cut budget deficits, saying deflationary concerns, weak growth prospects and rising borrowing costs threaten to undermine fiscal balances.

While Europe is most exposed to the risk of a sustained period of ultra-low inflation, the U.S. Federal Reserve also saw its preferred gauge of price changes remaining below its 2 percent target for almost two years. The IMF has termed such developments “low-flation” and is calling on countries to take action to prevent it from hurting output and reducing governments’ ability to repay debts.