IMF Urges Countries with Unsustainable Debt to Restore Stability

The International Monetary Fund (IMF) is warning that global public debt is rising sharply, with projections suggesting debt could approach or surpass pandemic-era highs by the end of the decade. This increase is being driven by recent U.S. tariff policies, countermeasures from other countries, and heightened market volatility, all of which are straining already fragile public finances. IMF Managing Director Kristalina Georgieva has urged countries with unsustainable debt to make difficult choices, including proactive debt restructuring when necessary, and announced the forthcoming release of a structured guide to support these decisions. Policymakers are also advised to maintain vigilance in managing inflation expectations, support central bank independence, and preserve exchange rate flexibility, especially in emerging markets. The IMF emphasizes the importance of strong financial regulation, domestic resource mobilization, and international cooperation to address fiscal risks and safeguard financial stability. These measures are deemed crucial for restoring debt sustainability and fostering long-term economic growth amid a challenging global environment.