At the United Nations General Assembly, IMF Managing Director Kristalina Georgieva called on advanced economies to slash borrowing and lower debt levels after weeks of escalating government interest costs. She said global shocks had been “pushing debt levels up like a staircase not to heaven” and that governments had taken “no action to contain that service cost.”
Georgieva urged politicians to muster the courage to implement fiscal consolidation and to ensure central banks deliver on price‑stability mandates. She noted that while external factors such as wars disrupting oil supplies were beyond governments’ control, they still had command over domestic policies.
The UK’s borrowing gap reached £18.3 bn ($24.4 bn) in August, a rise of almost 20 % over the previous year and higher than forecasts. US debt has surpassed $40 tn, doubling in a decade. Both countries face higher interest costs that threaten fiscal sustainability.
She added that advanced economies “don’t have the cash” to spur growth and must rely on reforms to encourage private investment. Georgieva praised consistent debt‑reduction efforts in some nations and highlighted the role of housing reforms.
Georgieva also warned that rising bond yields, driven by inflation and competition from large tech firms raising funds for AI, could pose financial‑stability risks if AI systems act independently. She called for a durable resumption of Gulf oil and gas exports to end the energy‑price shock.
In closing, Georgieva stressed that the steps required are politically tough but essential for long‑term stability. The IMF’s message to advanced economies is clear: bring debt down, prioritize fiscal consolidation, and ensure central banks keep inflation in check.
