World debt sustainability: is the IMF's optimism justified

Public debt to GPP: predicted sustainability in 2012-2014

Continues upwards shifts in debt since 2013

The 2008/9 financial crisis led to a hick-up in public debt to GPP ratio's, but for long IMF predicted that this was not very problematic as the forecasts of the IMF predicted a return to the year 2000 levels as illustrated in the Figure at the top left for the IMF's April World Economic Outlook published in 2012, 2013 and 2014. Actually, this has always been the IMF view since it started to publish world public debt to GPP ratio's.
Since 2014 this picture changed fundamentally, but not in the sense that the IMF is still predicting that the debt is still sustainable at the. end of the forecasting period as it is on a downward trend. The difference is that each recent update shows that this downward trajectory is shifting upward, demonstrating that each and every IMF forecast in the last five years has been too optimistic. This implies that serious questions arise about the sustainability of public debt at the world level.
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