According to IMF Managing Director Kristalina Georgieva, the United States and China are the principal contributors to global economic imbalances. European countries have also played a role by delaying needed reforms, creating structural distortions that compound the problem, she added.
Georgieva set out a targeted policy prescription for each power center. Beijing should boost domestic consumption and reduce excessive reliance on exports, Washington must tackle its rising debt burden, and Europe needs to accelerate investment and strengthen competitiveness. “To put it very simply, China needs to spend more, the US has to save more, and Europe has to invest more,” she said.
The IMF chief voiced particular concern about the US fiscal position. Georgieva warned that the White House cannot erase the threat posed by mounting liabilities through faster economic growth alone. Echoing US Treasury Secretary Scott Bessent’s warning about a critical budget shortfall and a federal debt that has topped $40 trillion, she noted that tough and urgent fiscal measures are inevitable.
