IMF Chief Says Economic Growth Alone Cannot Curb US Debt

(MENAFN) International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday that economic expansion by itself would not be enough to bring US public debt under control, calling for further steps to reduce budget deficits.

Speaking during the annual IMF-World Bank meetings in Bangkok, Georgieva explained that faster growth could strengthen government finances but would not achieve the required fiscal adjustment quickly enough.

She noted that US Treasury Secretary Scott Bessent understood the need to address the country’s elevated federal deficits and debt levels and put them on a more sustainable trajectory.

However, Georgieva said US policymakers were placing considerable emphasis on economic growth as the main way to ease these financial pressures.

Bessent has maintained that keeping growth above 3% over an extended period, alongside limits on government spending, could reduce the ratio of public debt to gross domestic product. The administration has identified investment in artificial intelligence, manufacturing growth and tax reductions as key contributors to economic activity.

Georgieva’s comments reflect the IMF’s wider call for governments to reinforce their fiscal positions as recurring shocks weaken their ability to respond to future crises.

In opening remarks released by the fund, she said the global economy continued to withstand frequent disruptions and uncertainty. However, she cautioned that its resilience was nearing its limits as energy reserves and fiscal buffers diminished, while inflation remained persistently elevated across many economies.

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