IMF Chief: "Global Debt at Record High; U.S. and China Must Reduce Fiscal Deficits"

[Financial News] With global public debt expected to exceed 100% of GDP in 2029—two years earlier than previously projected—due to surging debt in the United States and China, the IMF warned that "governments around the world must move quickly to reduce fiscal deficits and take measures to curb the growth of debt."
Kristalina Georgieva, managing director of the IMF, said at the Qatar Economic Forum in New York on the 20th (local time), "We have continued to warn that fiscal consolidation is necessary," adding, "There is considerable understanding of the problem, but not enough action."
Georgieva specifically addressed the fiscal situation in the United States. She said, "We have urged the United States to pay attention to its fiscal situation," adding that the current pace of debt growth is unsustainable and that the United States should gradually reduce its fiscal deficit and debt.
The problem is that as interest rates rise again around the world, the cost of servicing massive debt is also increasing. Georgieva said, "Inflation remains stubborn," and added, "Central banks around the world may have to follow the Federal Reserve System (Fed) and the European Central Bank (ECB) in raising interest rates further." She also warned that higher borrowing costs could further increase the burden of debt repayment.
Georgieva pointed out, "Energy and transportation disruptions caused by the war in the Middle East are also weighing on the global economy." She explained that the economies of commodity-exporting countries such as Qatar, the State of Kuwait, and Iraq could contract sharply. In this regard, the IMF expects Qatar's economy to contract by 8.6% this year. Before the war involving Iran, Qatar had been forecast to grow by 6.1%, but the outlook was dramatically reversed due to disruptions to energy transportation.
However, Georgieva also acknowledged, "Qatar is absorbing the current shock because it has built up sufficient fiscal space over the years." She noted, "Emerging markets' monetary policies are at levels similar to, or even more sound than, those of advanced economies," and pointed out, "The countries where debt has increased substantially are advanced economies."
[email protected] Hong Chae-wan Reporter