WASHINGTON, Oct. 12 -- An International Monetary Fund (IMF) official on Sunday called for smart fiscal policy to create jobs amid slow global economic recovery and high public debt levels.

Six years after the global financial crisis, unemployment remains at quite significant levels around the world, Vitor Gaspar, director of IMF Fiscal Affairs Department, told Xinhua on the sidelines of the Annual Meetings of the IMF and the World Bank.

"Employment is very much at the top of the global policy agenda," Gaspar said. "We have about 200 million unemployment people worldwide."

He said the most dramatic is probably the trend of youth unemployment.

In some advanced European countries, the unemployment rate among young people exceeds 50 percent; in many developing economies, the challenge is to be able to create enough jobs to absorb a very large number of young people entering the job market every year, he said.

Acknowledging this immense challenge, the IMF's latest Fiscal Monitor report released Wednesday shifted focus to jobs with the theme "Back to work: how fiscal policy can help."

This was the first Fiscal Monitor report since Gaspar, a former Portuguese finance minister, joined the IMF in early June.

While fiscal policy cannot substitute for comprehensive reform, it can work in tandem with broader structural reform efforts to support job creation, said the report, which is published twice a year to track public finance around the world.

The report also said the average debt-to-GDP ratio in advanced economies is still expected to exceed 100 percent at the end of the decade, though fiscal efforts in the last five years have stabilized that ratio.

"Given the challenges associated with this weakening recovery, the possibility of lower potential growth going forward, and very low inflationary rates in some regions of the world, in order to ensure reducing public debt-to-GDP ratio to safer levels, we need smart fiscal policy," Gaspar said.

"Smart fiscal policy reconciles the need to lower the public debt-to-GDP ratio to safer levels in the medium and long term with the need to support jobs and growth. And smart fiscal policy is very much friendly to structural reform and it ensures sufficient space for efficient public investment," he added.

Gaspar said fiscal policies and structural issues will be very much intertwined in the next many years. "Just to think about issues like demographic changes, climate change, issues to do with structural public expenditures, tax policy, budgetary procedures. ... All these topics are simultaneously fiscal and structural."

In terms of China, Gaspar said that the country faces the challenge of persisting in a sustainable growth path and that there has been welcome progress in the implementation of reform in the fiscal area.

For example, China's new Budget Law, which will enter into force in January next year, introduced multi-year budgeting and imposed greater discipline of local government finances, he said.

"It increases fiscal transparency and the quality of information which is available in China and elsewhere. It does provide a framework for financial control at all levels of government," Gaspar said.

Gaspar proposed cuts in payroll taxes and improvement in pension and health benefits. "This could be combined with reform of the social security system, improvement in the tax system, and cuts in lower-priority spending," he said.