BIS’s Caruana: fiscal space is ‘slippery’
Fiscal authorities should not overestimate the available room for manoeuvre, BIS chief says
The room for authorities to expand fiscal policy is not as clear-cut as many would like to think, Bank for International Settlements general manager Jaime Caruana said on November 30.
Speaking at the newly expanded BIS office in Mexico City, Caruana described fiscal space as "uncertain and slippery". Estimating debt sustainability is tricky, he said, and what may be sustainable currently may not remain so if sentiment in markets turns.
Second, high levels of private debt may affect public debt
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