By Zoila Palma: International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged the United States and China to make policy changes to address growing economic imbalances, warning that economic growth alone will not be enough to resolve mounting public debt.
Speaking on Wednesday at the World Bank-IMF Annual Meetings in Bangkok, Thailand, Georgieva said the United States needs fiscal adjustments to make its debt more sustainable, while China should shift from export-driven growth toward greater domestic consumption.
“At the Fund, we believe that growth of course helps, but it cannot deliver fast enough the necessary adjustments. So, some (fiscal) measures would be necessary,” she said.
Georgieva also highlighted concerns about rising inflation, government debt, and borrowing costs, which are placing additional pressure on countries worldwide, particularly low-income nations. IMF Fiscal Affairs Department Director Rodrigo Valdes said higher bond yields have reduced governments’ ability to respond to economic challenges, emphasizing the urgency of budget consolidation.
The IMF chief also called on member countries to fully fund support programmes for low-income and vulnerable nations facing rising debt-service costs.
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