IMF chief says global debt at record, urges urgent action

International Monetary Fund Managing Director Kristalina Georgieva urged governments on Sunday to take immediate action to narrow budget deficits, warning that global public debt has reached a record high and is on track to surpass 100% of global GDP by 2029 — two years earlier than previously forecast.

A Call for Fiscal Discipline

Speaking at the Qatar Economic Forum in New York, Georgieva said awareness of the problem is growing but policy responses remain inadequate. "We have been warning that fiscal consolidation must take place, and we are seeing a lot of understanding, but not enough action," she said, according to Bloomberg. The IMF identified the United States and China as the primary drivers of the accelerating debt trajectory.unn+2

Georgieva singled out the U.S. fiscal position, saying she had conveyed to Treasury Secretary Scott Bessent that the current path "is not sustainable" and that the country must gradually reduce its deficit and debt. The IMF's April 2026 Fiscal Monitor first flagged the revised 2029 timeline, moving the milestone up from its earlier projection of 2031.bloomingbit+3

U.S. Debt Crosses $40 Trillion

The warning arrives as U.S. national debt has already surpassed $40 trillion, a threshold it crossed in late August during the first 19 months of President Donald Trump's second term, according to Reuters Thomson Reuters Corporation ↗ 1.10%. The Council on Foreign Relations noted the figure amounts to roughly $117,000 per U.S. resident.cfr+1

Debt servicing costs are compounding the problem. According to Fortune, federal net interest payments reached 18.5% of revenue in 2025, surpassing the previous record set in 1991, with annual interest costs now exceeding $1 trillion — more than the entire U.S. defense budget. The Congressional Budget Office expects a federal budget deficit of $2.1 trillion in 2026, nearly 6% of GDP.ua+1

Inflation and Interest Rates Add Pressure

Georgieva also warned that inflation remains "persistent" and that high interest rates are increasing the cost of servicing government debt worldwide. The Federal Reserve raised its benchmark rate by 25 basis points last week, the first increase in more than three years, adding further pressure to borrowing costs across global markets. The yield on 10-year U.S. Treasury bonds has risen to around 4.8% in September, rippling through European bond markets and raising costs for eurozone borrowers.unn+2

The IMF plans to publish updated forecasts for the global economy and inflation next month.unn