AI Brief
- IMF Managing Director Kristalina Georgieva stated the US cannot rely solely on economic growth to address its rising public debt.
- Georgieva urged fiscal adjustments, noting US debt now exceeds US$40 trillion and current deficits are unsustainable.
- She also called for increased support to IMF trusts aiding low-income countries and highlighted risks from rapid AI development.
BANGKOK: The United States cannot grow its way out of mounting public debt and needs to make other fiscal adjustments to put it on a more sustainable path, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Wednesday (October 14).
Speaking at a news conference at the IMF-World Bank annual meetings in Bangkok, Georgieva said US authorities were relying on strong growth to bring down debt, but the Fund believed growth alone could not deliver the adjustment fast enough. Citing US Treasury Secretary Scott Bessent, she said US authorities recognised that deficits and overall debt, now above US$40 trillion, were too high.
"To put it very simply, China needs to spend more, the US has to save more, and Europe has to invest more," Georgieva said.
Georgieva also touched on current economic developments and the rapid pace of AI development, saying it could deepen the gulf between advanced and developing economies, especially given a sharp drop in development assistance.
She said the IMF recognised its responsibility to help finance countries when needed, and urged members to make good their pledges to the Poverty Reduction and Growth Trust, which provides low- and zero-interest loans to low-income countries.
The Fund was also asking members to replenish the Catastrophe Containment and Relief Trust, which provides grants for debt-service relief to the poorest and most vulnerable members.
