LONDON (Reuters) - The Bank for International Settlements warned on Sunday that rising government debt levels amid a number of major elections this year could roil global financial markets.

Dubbed the central bankers' central bank, the BIS said the world economy was now on course for the "smooth landing" that many economists doubted when interest rates shot up, but said policymakers, especially politicians, needed to be careful.

Global government debt is already at record levels and elections ranging from the U.S. presidential vote in November, through recent ones in Mexico and South Africa, to votes in France and Britain in the coming week, all carry risks.

BIS general manager Agustin Carstens said with interest rates not about to go back to ultra-low levels and cost pressures from aging populations, climate change and rebuilding defence capabilities, economic stimulus plans and a general rise in protectionism could unsettle sensitive markets.

"They can surprise you with not much notice," Carstens said, pointing to the turbulence in Britain's markets following then Prime Minister Liz Truss' budget plans which put some pension funds at risk of collapse. "You really want to avoid that."

As well as persistent concerns over U.S. debt levels, the French debt risk premium has surged this month to its highest level since the euro zone crisis in 2012, after French President Emmanuel Macron called a snap parliamentary election being held on Sunday that could bring in a far right government.

Carstens said the BIS was not calling out any "one or two" governments but that the message was clear.

"They (governments) must cut short the rise in public debt and accept that interest rates may not return to the pre-pandemic ultra low levels," he said. "We need a solid foundation to build upon".

INFLATION FIGHT

The positive, however, is that central banks are successfully reining in inflation that had hit decades-long highs after the COVID-19 pandemic and then Russia's 2022 invasion of Ukraine, which riled commodity markets.

"Compared to last year, I have to say we are in a much better place," the former Mexican central bank governor told reporters as the BIS published its annual report.

Although Carstens said central banks deserved praise for navigating a difficult path that could have resulted in a wave of recessions, he added they needed to persevere, likening the inflation fight to a course of antibiotics to tackle an illness.

He described an "extreme" scenario where inflation races up again and central banks need to raise rates further. But that is not what the BIS expects.

The BIS report did though say central banks should not rush into rate cuts.

"A premature easing could reignite inflationary pressures and force a costly policy reversal," it said.

(This story has been corrected to fix the year of the euro zone debt crisis in paragraph 6)

(Reporting by Marc Jones; Editing by Emelia Sithole-Matarise)