IMF chief signals austerity is back as global public debt heads for 100% of GDP
IMF chief Kristalina Georgieva has urged heavily indebted governments to tighten their belts and central banks to take a hawkish stance, signalling a return to austerity as the energy shock from the Iran war, record public debt and a credit-fuelled AI investment boom weigh on the global economy.
IMF chief Kristalina Georgieva has warned that austerity measures are becoming increasingly necessary as global public debt nears 100% of GDP. Speaking ahead of the IMF and World Bank annual meetings in Bangkok, Georgieva emphasized the need for spending discipline and tighter monetary policy worldwide, as borrowing costs are rising and governments can no longer rely on growth alone to manage fiscal issues.
She singled out developed economies as the most in need of credible fiscal consolidation plans, with borrowing costs for 10-year government bonds in the US, Germany, and Japan at their highest levels in decades. Georgieva also highlighted the dual impact of energy supply shocks from the Iran war and AI-driven demand, warning of potential inflationary effects from AI investment and potential risks such as job losses, cyberattacks, and uncontrollable advanced models.
Brief written by urgent.news from Euronews's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
