The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has warned that the global economy’s resilience is reaching its limit, which is why countries urgently need to fix their public finances—as “winter is coming”—as well as address growing global imbalances, for which “China needs to spend more; the United States, save more; and Europe, invest more.”
At a press conference in Bangkok during the IMF and World Bank Autumn Meetings, the Bulgarian economist explained that rising debt levels and higher debt-servicing costs—with advanced economies being “the most affected”—stem from persistent inflation, higher investor demand, higher expected future growth linked to AI, and, of course, fiscal fundamentals.
“Too many countries failed to take advantage of the post-pandemic recovery to rebuild their fiscal buffers, and each new shock has pushed debt levels higher,” she lamented, before urging governments to “urgently repair public finances before cracks deepen” by boosting revenue, streamlining spending, and improving public financial management.
Furthermore, in the face of rising energy and food prices, Georgieva defended the importance of “protecting people, not prices,” which means providing temporary and targeted support to the most vulnerable while preserving market price signals.
