The World Bank President Malpas said on May 12, local time that the risk of US debt defaults is increasing the problems facing the global economy, and the rising interest rates and higher debt levels have stifled the investment required to promote output growth.
Malpas said during the meeting of the Seventh -way Group (G7) financial officials in Japan, "Obviously, the dilemma of the world's largest economy (USA) is not good for everyone. If this problem is not resolved, the consequences will be bad."
Malpaas said that global economic growth is expected to fall to less than 2%in 2023 and may maintain low growth within a few years.One of the huge challenges is that the developed economies bear so much debt that requires a lot of capital to repay, leaving too little investment in developing countries.
US Treasury Secretary Yellen reiterated on the same day that if the US Congress does not raise the upper limit of debt, it will lead to economic and financial disasters.She also warned that the United States may have debt default on June 1st.
It is reported that Yellen had previously avoided a problem that if the upper limit of the debt was broken, whether the US Treasury Department would continue to pay bonds.In this regard, she said that there is no better choice except the US Congress to increase debt limit.Since 1960, Congress has raised its debt limit by nearly 80 times.
Yellen said, "We have not discussed with the president, what should I do if we fail to raise the upper limit of debt." She also said that as the date approaches, the US Ministry of Finance may provide more accurate guidelines to explain when it will be when it will beDevelop cash for payment of government bills.
Regarding the current debt status of the United States, German Finance Minister Lindona pointed out on May 12 that he hopes that American politicians can make a "mature" decision to increase the upper limit of federal debt and warn that if they do not do this, the global economy will beIt will face risks.
