IMF chief urges governments to confront rising debt and borrowing costs

International Monetary Fund managing director Kristalina Georgieva urged governments in Singapore on October 7 to confront rising public debt and borrowing costs, warning that delayed action would leave budgets under greater pressure. Her call was directed particularly at high-debt advanced economies; it was a policy recommendation, not an announcement that governments had agreed to new measures.

Georgieva said global public debt was at its highest level relative to economic output since the Second World War and was heading towards 100% of GDP. The IMF’s April Fiscal Monitor put debt at just under 94% of global GDP in 2025 and projected it would reach 100% by 2029, a year earlier than the fund had forecast in April 2025. That 100% figure is a forecast, not today’s measured debt level.

What Georgieva asked high-debt economies to do

Georgieva told policymakers they could not keep delaying action. She called for credible medium-term plans to bring public finances under control in high-debt advanced economies, supported in some cases by measures taken upfront. She said governments could not count on rapid growth alone to ease their debt burden and would face difficult political choices.

Her warning centred on the cost of servicing existing borrowing. Higher bond yields increase the interest governments must pay when they issue debt, adding to bills at a time when budgets are already tight. Georgieva specifically cited competing spending priorities, including defence. The Guardian reported that yields had risen in recent weeks as markets adjusted to inflation risks associated with the Middle East war; the reporting does not establish how much of that rise the conflict caused.

How rising debt could affect poorer countries

The pressure is not confined to wealthy economies. Associated Press reported Georgieva’s warning that low-income countries could face difficult choices between spending on public welfare and repaying loans when interest rates are high. AP also reported that she urged governments to restrain public spending and raise borrowing costs where needed to contain inflation, while protecting vulnerable people.

Those are competing priorities rather than a single prescription for every country. Higher interest payments can leave less room in a budget for other spending, while measures intended to curb inflation can create further trade-offs. The available reporting does not identify specific cuts, tax changes or interest-rate decisions that governments will make in response to Georgieva’s speech.

Why the IMF’s 2029 debt forecast needs context

The IMF’s projection rests on statistical information available through April 1, 2026. The fund cautioned that its estimates might not reflect all later published data. Its April report also highlighted vulnerabilities in sovereign debt markets, including the growing role of leveraged nonbank intermediaries and a reduced safety premium for US Treasury securities. These are risks identified by the IMF, not proof that a wider debt-market shock has occurred.

Georgieva’s remarks came ahead of the IMF and World Bank annual meetings in Bangkok. The IMF listed an October 7 curtain-raiser featuring Georgieva and scheduled a Fiscal Monitor briefing for October 14. AP reported that finance ministers and central bank governors from the institutions’ 191 member countries were expected to assess the global economy and discuss financial stability and sustained growth at the meetings. Those discussions and any decisions still lay ahead when she spoke.

Georgieva also raised the possibility that central banks might need a cautiously tougher stance against renewed inflation. The Guardian reported that the European Central Bank, US Federal Reserve and Bank of Japan had tightened policy, while the Bank of England had held its rate at 3.75% at the time of its report. Her suggestion does not establish what any central bank will decide next.