IMF warns of U.S. deficits and debt: “Economic growth alone can’t solve it”

[Financial News] The International Monetary Fund (IMF) urged the United States, which has recently experienced a sharp plunge in Treasury prices, to take fiscal measures to address its record debt. The IMF chief rejected the U.S. government's position that it need not worry about debt as long as it maintains economic growth.
According to U.S. business news outlet CNBC, IMF Managing Director Kristalina Georgieva spoke about the U.S. debt problem while attending the annual meetings of the IMF and the World Bank in Bangkok, Thailand, on the 14th. She said that U.S. debt overall, including that of the federal government, was “too high,” and that the government there was “currently relying on strong U.S. economic growth” to address its debt. Georgieva said, “Growth certainly helps, but it is not enough to achieve the necessary adjustments quickly.” She added, “Some (fiscal) measures may be needed.”
The U.S. government has chronically failed to escape deficits. It managed to achieve a temporary fiscal balance under the Bill Clinton administration in the 1990s, but only briefly. The U.S. government also rolled out massive stimulus measures to respond to the spread of COVID-19 in 2020–2021.
In an announcement last month, the U.S. Treasury said that the country's total national debt had reached $40.047 trillion (about 53.943 quadrillion won), surpassing $40 trillion for the first time ever. Prices of 10- and 30-year U.S. Treasury bonds are now at their lowest level in about 24 years, amid multiple factors including the country's growing debt, the Iran war and interest rate hikes.
The second Trump administration views the debt-to-GDP ratio as more important than the absolute amount of debt. Speaking at a lecture on the 8th of last month, U.S. Treasury Secretary Scott Bessent said, “The problem with the U.S. government is not tax revenue but spending.” He said the country could get through the problem if the government curbed spending and “achieved annual GDP growth in the 3% range.” He also stressed that the debt-to-GDP ratio could be lowered if spending and GDP growth were sustained. In an announcement in August, Bessent said the government deficit may have peaked.
Some experts, however, believe the debt will continue to grow. According to the U.S. Federal Reserve System (FRS), the U.S. government's debt ratio in fiscal year 2025 was 5.8% of GDP. CNBC forecast that the ratio would reach 6% by year-end. In a report on the 25th of last month, Ben Steil, a senior fellow at the U.S. think tank Council on Foreign Relations (CFR), said, “If the government operates with debt amounting to 6% of GDP, another $7 billion will be added to the national debt today, and it will keep growing every day.”
Meanwhile, in its World Economic Outlook (WEO) report for this year, released on the 13th, the IMF forecast annual U.S. GDP growth of 2.3% in 2026–2027.
 

[email protected] Jong-won Park Reporter