Facing an expanding debt load, the International Monetary Fund assessed that growth alone cannot carry the weight of fiscal consolidation for the United States, and called on its government to pursue budgetary adjustments. Boosting household spending at home has been identified as a path toward lessening the country's reliance on export-driven growth and easing the broader imbalances that have built up in global trade.

At the IMF and World Bank annual meetings in Bangkok on Wednesday, IMF Managing Director Kristalina Georgieva urged economies to pursue deeper structural adjustments, pointing to elevated borrowing costs and mounting public debt as pressures weighing on the stability of global finances. Both the United States and European economies were named by Georgieva as factors driving levels of public debt beyond sustainable bounds. Rising bond yields are adding to the debt burden faced by nations across the developing world, she noted.

Georgieva noted that Washington's plan for narrowing the fiscal gap rests primarily on growth projections, even as Treasury Secretary Scott Bessent has pointed to the deficit as a problem requiring attention. Faster economic expansion alone, the IMF has found, would fall short of trimming debt at the pace needed, leaving tax adjustments or spending changes as tools in the process.

That assessment came on the heels of the IMF's Fiscal Monitor, whose most recent edition pointed to mounting pressure on governments to rein in public spending at a time when interest rates and debt-servicing costs remain elevated. Bond yields on government debt have been trending upward, compressing the space available for budget manoeuvring and placing fiscal reform at the top of the policy agenda, according to Rodrigo Valdes, head of the IMF's Fiscal Affairs Department.

Bessent has not attended the Bangkok meetings, where the IMF and World Bank annual sessions are under way, despite the United States holding the Group of 20 presidency for the current year. The administration's domestic economic agenda, shaped partly by the approach of US midterm elections, has drawn the president's attention away from the trip.

Trade data have drawn fresh scrutiny toward the performance of China's export-oriented economy, with the latest figures pointing to a merchandise surplus that may set an all-time high. Georgieva called on China to boost consumer spending and reorient its economy around domestic demand. Her recommendations extended to lifting household and government saving rates in deficit-running economies, alongside directing more capital toward competitiveness-building efforts throughout Europe.

Broadening financial relief for poorer countries weighed down by ballooning debt obligations was the central appeal the IMF chief put to the global lending community. A call went out to member nations to back both IMF trust mechanisms fully — one structured around concessional financing for poverty reduction and growth, the other designed to deliver debt relief in catastrophic circumstances.

Debt-service obligations across lower-income economies have risen to roughly 14 cents of every government revenue dollar, Georgieva noted, more than double the 6 per cent share recorded ten years prior. Widening disparities in wealth — including the unequal distribution of returns from artificial intelligence investment — could leave lower-income nations at a deeper disadvantage, she indicated, without coordinated government action to strengthen financial support and put in place fiscal structures oriented toward long-term sustainability.