Global Market: IMF Urges Governments to Cut Spending, Reduce Debt as Borrowing Costs Rise
The Fund said average financing costs are projected to rise to 3.7% by 2031, leaving governments with less room to delay consolidation.
- On Wednesday in Bangkok, the International Monetary Fund urged advanced economies to immediately reduce government spending and cut deficits, warning that delays will make fiscal adjustments increasingly painful.
- Rising sovereign bond yields and high debt levels drive this pressure, with average public debt poised to hit 100 per cent of GDP, the highest level seen since World War Two.
- The Group of Seven economies saw 10-year government bond yields climb over 110 basis points since February, while US interest payments are projected to reach 5.3 per cent of GDP.
- "The fiscal results this year are worse than expected six months ago," Rodrigo Valdes, chief of the IMF's Fiscal Affairs department, told Reuters, urging immediate fiscal consolidation.
- Low-Income countries face heightened stress as interest payments consume over 15 per cent of tax revenues, prompting the IMF to advise these nations to strengthen tax systems and improve spending efficiency.
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82 Articles
In an article published by the International Monetary Fund (IMF), economists say that high monetary policy rates, when the debt is already high, cause a greater deterioration in the fiscal deficits and the very trajectory of government debt. According to IMF calculations, the average effective cost of interest paid by governments to finance should rise from 2.3% in 2021 to 3.7% in 2031.
Jornal Expresso
Global public debt reached 94% of GDP in 2025 and is expected to reach 100% by 2029, in a framework of increasing pressures on public finances, points out the International Monetary Fund
Bangkok, Oct 14 (EFE).- The Director of the International Monetary Fund (IMF), Kristalina Georgieva, said on Wednesday that "China has to spend more, the United States save more and Europe invest more", after the agency warned that the increase of public debt demands a greater fiscal effort. Georgieva made those statements during a [...] The IMF entry warns that the rise in yields requires more fiscal adjustment to stabilize the debt was first p…
Global borrowing costs rise as bond yields increase: Fitch
The recent sharp and widespread increase in government bond yields represents a significant increase in real global borrowing costs. Bond yields have risen to multi-decade highs in the US, Germany, UK and Japan in recent weeks, as highlighted in Fitch Ratings’ latest Economic Monitor chart pack.
IMF rings alarm bell on 'excessive global imbalances'
The head of the International Monetary Fund on Wednesday called for countries to make "urgent repairs" to address fiscal balances as bond yields spike and pressure grows on governments to manage ballooning debt. "What is our loudest call to policymakers right now? Make urgent repairs to the fiscal house before the cracks widen," managing director Kristalina Georgieva said at a news conference on the sidelines of the annual meetings of the IMF an…
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