IMF chief urges US to pair growth with fiscal action on debt

The United States cannot reduce its public debt quickly enough through economic growth alone, IMF Managing Director Kristalina Georgieva said on October 14. She called for changes to tax and spending policy to bring debt and deficits down.

Speaking during the annual meetings of the IMF and World Bank, Georgieva described US debt and budget deficits as too high. Growth would help improve those measures, she said, but would not deliver the necessary adjustment fast enough without additional fiscal measures.

She identified advanced economies, particularly the United States and European countries, as prominent examples of excessive indebtedness. Rising yields on their government bonds also affect low-income countries, forcing them to limit their own borrowing.

The IMF’s Fiscal Monitor, released on October 14, likewise called for more active efforts to reduce public debt. It warned that postponing fiscal action while borrowing costs rise would make it harder to bring debt burdens down in later years.