The International Monetary Fund urged governments to move quickly to narrow their budget deficits to rein in global debt, which has swelled to a record high.
IMF Managing Director Kristalina Georgieva made the remarks at an economic forum sponsored by the Qatari government in New York on the 20th, saying that countries are not doing enough to shore up their fiscal positions, Bloomberg reported.
The IMF projects that global public debt will exceed 100% of gross domestic product in 2029, two years earlier than previously expected, as government borrowing rises rapidly in the United States and China.
"We have warned for a long time that fiscal consolidation is needed, and everyone knows it is necessary," Georgieva said. "But not enough is actually being done."
She expressed particular concern about the fiscal position of the U.S., the world's largest economy. "I discussed the issue with U.S. Treasury Secretary Scott Bessent," Georgieva said, adding that there was agreement that the current debt structure is not sustainable and that the U.S. needs to gradually reduce its budget deficit and debt. Last month she also warned that most advanced economies, including the U.S., are on debt paths that require particular care in fiscal management.
Monetary policy at central banks was also cited as a factor that could add to debt burdens. Georgieva said global inflation pressures remain persistent and that major central banks, including the U.S. Federal Reserve and the European Central Bank, may need to raise interest rates further. Higher rates would push up borrowing costs, increasing interest payments for governments already carrying heavy debt loads.
She also warned about the impact of war in the Middle East on the global economy, saying the conflict between Iran and the U.S. could sharply contract the economies of major commodity producers such as Qatar, Kuwait and Iraq.
Her assessment of Qatar, however, was relatively positive. Georgieva said Qatar, the world's second-largest exporter of liquefied natural gas before the war, had built up substantial economic buffers that are now helping shield its economy from the shock of the conflict.
