The International Monetary Fund urged countries on Wednesday to rein in fiscal spending and rebuild their buffers, but said that could prove difficult in the world's biggest-ever election year.

A record 88 countries, home to more than half of the world's population, have held or are holding national elections in 2024, the IMF said, noting that governments tend to spend more and tax less during election years.

"The most acute risk to public finances arises from the record number of elections being held in 2024, which has led to it being dubbed the 'Great Election Year,'" the IMF said in its new Fiscal Monitor publication.

The United States will hold its presidential election in November, while voters in India will begin voting later this month. Taiwan, Portugal, Russia and Turkey have already held elections.

The IMF said budget overruns were often likely in election years, a risk amplified by increased demand for social spending. It said deficits in election years tended to exceed forecasts by 0.4 percentage points of GDP, compared to non-election years.

Slowing growth prospects and still-high interest rates would further constrain fiscal space in most economies, it said.

The IMF said on Tuesday the global economy is set for another year of slow but steady growth, forecasting global real GDP growth of 3.2% for 2024 and 2025 - the same rate as in 2023.

On Wednesday, it said the global economic outlook had improved in the last six months, but many countries were still struggling with high debt and fiscal deficits given high interest rates and dimming medium-term growth prospects.

Advanced economies, excluding the U.S., were still spending 3 percentage points more than before the COVID-19 pandemic, while emerging market economies, excluding China, were spending 2 percentage points more, the report said.

Global public debt, meanwhile, edged up to 93% of gross domestic product (GDP) in 2023 - about 9 percentage points above the pre-pandemic level. The debt increase was led by the U.S. and China, where debt rose by more than 2 and 6 percentage points, respectively.

The IMF said countries should unwind some support measures introduced during the pandemic and rebuild fiscal buffers, especially in cases where sovereign risks were high.

"Governments should immediately phase out legacies of crisis-era fiscal policy, including energy subsidies, and pursue reforms to curb rising spending while protecting the most vulnerable," it said in a blog released with the new report.

Advanced economies with aging populations should reform health and pension programs to contain spending pressures, the IMF said. They could also bolster revenues by targeting excessive profits as part of the corporate income tax system, it said.

Emerging market economies and developing economies could raise tax revenue by improving their tax systems, expanding their tax bases and strengthening institutional capacity - which together yield as much as an additional 9% of GDP, the IMF said.

Without decisive efforts to reduce deficits, the IMF said public debt would continue to rise in many countries, with global public debt projected to approach 99% of GDP by 2029. The increase will be driven by China and the United States, where public debt is expected to rise beyond historical peaks.

(Reporting by Andrea Shalal; Editing by Jacqueline Wong)