IMF calls for public support amid debt reform measures

The International Monetary Fund (IMF) has urged Ghana and other nations implementing debt reforms to build public acceptance of energy subsidies and pension adjustments.

The Fund noted that such reforms, despite their long-term benefits, often faced resistance from the public, civil society organisations, labour unions, and opposition groups.

It recommended effective communication and stakeholder engagement, citing successful approaches in Morocco, Germany, and Colombia.

At a press briefing on the report’s release, Vitor Gaspar, Director of the IMF Fiscal Affairs Department, said energy subsidies and pension reforms could reduce debt, generate savings, and spur growth.  

However, he acknowledged their immediate negative impact on individuals, families, and businesses, stressing the need to highlight their role in financial stability and expanded public services.

The media engagement took place on the sidelines of the 2025 IMF/World Bank Group (WBG) Spring Meetings in Washington, D.C.

Gaspar noted that emerging and low-income countries spend an average of 1.5 per cent of their GDP on energy subsidies—more than their social spending on the poor.

Pension expenditures account for four per cent of GDP in emerging markets.

“For instance, Colombia successfully implemented a two-year timeline for gasoline price adjustments. Sticking to this schedule helped build public trust and reduced resistance,” he said.

He added that Morocco raised fuel prices by about 20 per cent in February 2025 to address budget pressures while preparing citizens for full subsidy removal.

The April Fiscal Monitor highlighted rising global public debt, projected to approach 100 per cent of GDP by the decade’s end, surpassing pandemic levels.

The report noted that high debt, slow growth, rising interest costs, and spending pressures limited fiscal space, making policy choices more difficult.

It urged nations to “keep their own house in order” by adopting stability-focused macroeconomic policies, reducing debt, building financial buffers, and fostering potential growth to ease policy trade-offs.

Source: GNA

The post IMF calls for public support amid debt reform measures appeared first on Ghana Business News.

Read Full Story