US Debt Swells to IDR 550,693 Trillion, IMF Warns About Risks

JAKARTA – International Monetary Fund or IMF highlights overproduction by United States government or the US and warned about a surge in inflation which could ultimately impact financial stability around the world.

According to the latest World Economic Outlook, released by the IMF on Tuesday, yesterday the US federal budget deficit jumped from USD 1.4 trillion in the 2022 fiscal year to USD 1.7 trillion in 2023.

“The recent extraordinary performance of the United States is certainly impressive and a major driver of global growth,” said the IMF as reported by RT.

However, the report explains that this “reflects strong demand factors, including a fiscal stance that is inconsistent with long-term fiscal sustainability.”

US national debt which swelled, to exceed USD34 trillion or the equivalent of IDR 550,693 trillion (Exchange rate of IDR 16,196 per USD) in December, and the fiscal deficit threatened to exacerbate the very high level of inflation. Ultimately this poses long-term risks for the global economy, according to the latest report from the IMF.

“Something must be done,” the IMF warned.

The US is known to have exceeded its debt ceiling, legally set at USD31.4 trillion, in January 2023. After months of warnings about an imminent default and economic disaster from the US Treasury, President Joe Biden in June 2023 signed the debt bill bipartisanship that suspended the limit until January 2025.

This condition effectively allows the government to continue borrowing without limit until next year. US debt then soared to $32 trillion less than two weeks after the bill was approved, and has continued to pile up ever since.