IMF urges advanced economies to 'bring debt down' as borrowing costs rise

The International Monetary Fund (IMF) has intensified its call for advanced economies to significantly reduce their national debt, as global borrowing costs continue to climb. IMF Managing Director Kristalina Georgieva highlighted that global public debt has reached unprecedented levels and is now projected to exceed 100% of the world's Gross Domestic Product by 2029, two years sooner than previously estimated. This urgent advice comes amidst persistent inflation, which may necessitate further interest rate increases by central banks, thereby escalating government borrowing expenses and the cost of servicing existing debt.

The IMF points to the rapidly increasing debt in major economies, particularly the United States and China, as primary contributors to this concerning trend. Georgieva emphasized that while there is widespread recognition of the need for fiscal consolidation, concrete actions to address fiscal deficits and debt growth remain insufficient. The rising bond yields in advanced economies are not only a domestic challenge but also place renewed pressure on emerging markets and low-income countries by driving up their own borrowing costs and debt service burdens.