The key facts

  • IMF chief Kristalina Georgieva says US public debt cannot be solved through GDP growth alone without tax and spending adjustments
  • She called advanced economies, primarily the US and Europe, leaders in excessive indebtedness, whose rising bond yields hurt low-income countries
  • The IMF's October 14 Fiscal Monitor report warned that delays in debt-reduction measures will worsen the problem
IMF chief says the US public debt problem cannot be solved through GDP growth alone

MOSCOW. October 14. INTERFAX.RU - The United States will not be able to solve the problem of its growing public debt through economic growth alone without adjusting taxes and budget spending, IMF Managing Director Kristalina Georgieva said at a press conference held as part of the annual meeting of the International Monetary Fund and the World Bank.

She named advanced economies, primarily the United States and European countries, as the leaders in excessive indebtedness, noting that rising yields on their government bonds negatively affect low-income countries, forcing them to limit their own borrowing.

Answering a question about whether the US needs a tighter fiscal policy, Georgieva said that the levels of budget deficit and public debt in the United States are too high and need to be brought down to more acceptable levels. According to her, Washington is relying heavily on strong economic growth, hoping it will help reduce the debt.

"At the IMF, we believe that growth certainly helps, but it will not deliver the necessary changes fast enough," Georgieva said, emphasizing the need to take additional measures in tax and budget policy.

The need for more active steps to reduce public debt was also highlighted in the IMF's Fiscal Monitor report released on October 14. The document states that, against the backdrop of rising borrowing costs, delays in implementing such measures will only make it harder to resolve the problem of excessive indebtedness in the years ahead.