IMF chief urges US and wealthy nations to rein in debt to ease global economic pressure
Kristalina Georgieva said growth alone cannot reduce deficits fast enough and warned that low-income countries face higher borrowing costs.
- On Wednesday, IMF Managing Director Kristalina Georgieva urged wealthy nations to urgently address mounting global debt, warning that economic growth alone cannot resolve the more than $40 trillion in national debt.
- Rising debt levels and global inflation, worsened by high energy costs from the Iran war, pushed interest rates to multidecade highs, complicating efforts to achieve "fiscal consolidation" following heavy COVID-19 spending.
- Developing nations now pay three times more on interest repayments than wealthy nations, with nearly 10% of government spending going toward debt; the Nino phenomenon further restricts recovery opportunities.
- The UNDP announced a "Jobs for Prosperity" initiative this week, aiming to work with the World Bank and private businesses to encourage investment in tourism, healthcare, and food processing.
- With more than 1.2 billion young people entering the global workforce, forecasts suggest only 400 million new jobs will be created, prompting Alexander De Croo to emphasize creating "investible projects.
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45 Articles
'There is no magic': IMF says U.S. and other nations must 'go in a direction of tightening' global debt as economic growth can't 'deliver fast enough'
Meanwhile, rising bond yields, reflecting higher premiums demanded by investors for taking on greater risk, have been disrupting financial markets.
"Growth helps, of course, but it is insufficient to bring the necessary adjustments in time," said Kristalina Georgieva, who believes that budgetary adjustments are necessary. The repairs are in line with the comments of the US Treasury Secretary the previous month, he who does not make a presence at the joint IMF and World Bank meeting in Bangkok.
DECRYPTAGE - The growing debt burden of large economies is a concern for the International Monetary Fund, which calls for "urgent measures" to redress its finances.
The head of the International Monetary Fund (IMF) has called on the US Treasury Department to reduce public debt, which is forecast to reach 142 percent of GDP, through specific fiscal measures instead of relying solely on economic growth, CNBC reported.
The US will not be able to solve the problem of rising public debt solely through economic growth without adjusting taxes and budgetary expenditures, said the IMF Managing Director, Kristalina Georgieva, at a press conference at the annual meeting of the International Monetary Fund and the World Bank.
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