IMF Managing Director Kristalina Georgieva (L) speaks with US Treasury Secretary Scott Bessent before a morning business meeting to “rekindle balanced, inclusive and sustainable economic growth for the benefit of all” in the presence of G7 countries, partner countries, the International Monetary Fund and the OECD, as part of the G7 summit, in Evian, eastern France, on June 17, 2026. Ludovic Marine | AFP | Getty Images BANGKOK – The head of the International Monetary Fund has urged Treasury Secretary Scott Bessent to cut the deficit, warning that his plan to rely on growth to rein in U.S. government debt is not enough. “Growth, of course, helps, but it cannot achieve the necessary adjustments quickly enough,” managing director Kristalina Georgieva said on a panel Wednesday at the IMF and World Bank annual meetings in Bangkok. “Some [fiscal] “Measures would be necessary.” Georgieva said Bessent recognizes that federal deficits and overall debt have risen “too high,” and that measures are necessary to improve budget balance and reduce debt. But “authorities are relying heavily on strong growth in the United States” to reduce them, he said. Bessent and Trump administration officials have touted resilient economic growth, fueled by the development of artificial intelligence, the reshoring of manufacturing and tax cuts for consumers, as crucial tools for improvement. US federal debt has surpassed 100% of gross domestic product, once an unthinkable threshold, with the public debt burden exceeding $40 trillion and on track to break a record set after World War II. It has historically spent more than it raises through taxes, committing to unbalanced spending in the decades since President Bill Clinton briefly managed to balance the budget in the 1990s, but debt-financed spending has accelerated sharply in recent years. Trump cut taxes in his first term and signed the first Covid relief packages in 2020, which Joe Biden followed with a $1.9 trillion stimulus in 2021. That federal spending helped avoid a recession, but it also fueled inflation that still weighs on. on American households and businesses Before his appointment, Bessent had said he wanted Trump to reduce the deficit to less than 4% of GDP by the end of his term, and said in August that the US budget deficit had likely peaked. The U.S. Treasury bond market has been battered this year with yields rising to multi-decade highs as investors bet that rising energy costs and heavy spending on AI will keep borrowing costs at higher levels near their highest level since 2002. The debt pile grows about 5.2% on Wednesday. Although budget figures for the fiscal year that ended Sept. 30 have not yet been released, the deficit is expected to top 6% of GDP, up from 5.8% in fiscal 2025. “With the government running an annual budget deficit of 6 percent of GDP, the debt will rise another $7 billion by the end of today, and each day afterward,” said Benn Steil, senior fellow and director of international economics at the Council on Foreign Relations. Steil also warned that it could be “reckless” for Washington to declare the debt crisis resolved by supporting unsupported projections, pushing for spending and revenue reforms. The IMF, which released its October World Economic Prospects report on Tuesday, forecasts US growth of 2.3% in both 2026 and 2027, and projects that US gross public debt will reach 142% of GDP by 2031. of GDP before the end of the decade, the highest since the Second World War. Bessent reportedly did not attend this week’s meetings to attend to “internal commitments.”
