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While government debt levels are climbing worldwide, with debt burdens in emerging markets rising rapidly, so far there is not evidence of a systemic debt crisis, but there are risks ahead, International Monetary Fund First Deputy Managing Director Gita Gopinath on Wednesday said.

Speaking at the World Economic Forum's annual meeting in Davos, Switzerland, Gopinath said, "As yet we do not see a systemic sovereign debt crisis, but the risk ahead is salient."

The managing director of the IMF also sought to dispel the gloom this week, saying a global recession isn’t in the cards but “it doesn’t mean it’s out of the question."

Gopinath further said that advanced economies will be back on track by 2024, but developing economies will be 5% below where they would have been otherwise.

Economies across the globe have been adversely impacted by the coronavirus pandemic and are slowly coming back into the recovery path.

Gopinath said the Ukraine crisis has been a major setback to the global recovery.

"We had a serious downgrade to the global growth rate and the world continues to face headwinds because we have a cost of living crisis. Prices of commodities including fuel and food are going up around the world," she said.

Gopinath said central banks are trying to tackle this high level of inflation and are raising interest rates sharply, which they need to do, but that will also have consequences for global finance and trade.

Gopinath said there are very divergent recoveries around the world.

"While advanced economies, as per our estimates, will basically get back to where they would have been in absence of pandemic in 2024, but emerging and developing economies would be 5% below where they would have been in the absence of the pandemic," she added.

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