IMF warns debt overhang and financial vulnerabilities pose double threat to economic recovery

IMF warns debt overhang and financial vulnerabilities pose double threat to economic recovery

LONDON “” Policymakers and central banks need to be "very selective" with stimulus measures to avoid endangering global economic growth over the medium term, according to a top official at the International Monetary Fund, with a debt overhang and financial vulnerabilities identified as possible risks.

The warning comes as the IMF appears to be trying to orchestrate a delicate balancing act at its spring meetings this week.

The Washington D.C.-based institute has singled out the U.S. for praise in enacting extraordinary stimulus amid the ongoing coronavirus crisis to fast-track a global economic recovery, while also warning about the potential for these measures to cause longer-term structural damage to worldwide economies.

"There's no question that stimulus in the United States presents a very favorable backdrop to the growth projections that we have made," Geoffrey Okamoto, first deputy managing director of the IMF, told CNBC's Joumanna Bercetche on Wednesday.

"I wouldn't characterize it as a crutch. This is a tailwind, right, that countries should be able to use or capitalize on to try and ride through the remaining amount of time until they can get all of their citizens jabbed and their economies reopen," he added.

The IMF said in its World Economic Outlook on Tuesday that