The International Monetary Fund has warned advanced economies to start cutting spending and rein in huge national debts starting next year.
John Lipsky, the IMF's first deputy managing director, said stimulus spending can continue in 2010 to drive the global economic recovery.
But he warned that wealthy nations must cut spending, increase tax revenues and reform the pensions and health benefits systems from 2011.
"Addressing this fiscal challenge is a key near-term priority, as concerns about fiscal sustainability could undermine confidence in the economic recovery," Lipsky told the China Development Forum in Beijing.
"Already in several countries with particularly high debt and deficits, sovereign risk premia have risen sharply, imposing strains for the countries affected and raising risks of possible broader spillovers," he said.
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