IMF Managing Director Kristalina Georgieva (left) speaks with US Treasury Secretary Scott Bessent ahead of a morning working session to “restore balanced, inclusive and sustainable economic growth for the benefit of all” in the presence of G7 countries, partners, the International Monetary Fund and the OECD as part of the G7 Summit in Evian, eastern France, on June 17, 2026.
Ludovic Marin | AFP | Getty Images
BANGKOK — The head of the International Monetary Fund has urged Treasury Secretary Scott Bessent to reduce the budget deficit and warned that his plan to rely on growth to rein in U.S. government debt is not enough.
“Growth will certainly help, but it will not bring about the necessary adjustments quickly enough,” Managing Director Kristalina Georgieva said Wednesday during a panel discussion at the IMF/World Bank annual meeting in Bangkok. “Some (financial) measures will be necessary.”
Georgieva said Bessent recognizes that the federal deficit and overall debt have grown “excessively” and that measures are needed to improve the fiscal balance and reduce debt. But “authorities are relying heavily on strong U.S. growth,” she said.
Officials in the Bessent and Trump administrations have touted resilient economic growth through enhanced artificial intelligence, manufacturing reshoring and consumer tax cuts as important tools to improve the U.S. fiscal position.
“With 3% growth, we can grow out of this situation,” Bessent said last month. He argued that sustained growth above 3% and spending restraint could lower the debt ratio and bend the debt-to-GDP curve.
The U.S. federal debt has reached a previously unthinkable level, exceeding 100% of gross domestic product (GDP), with the nation’s public debt burden exceeding $40 trillion, on track to shatter records set after World War II.
The U.S. government has historically spent decades after President Bill Clinton briefly balanced the budget in the 1990s, spending more than it collected in taxes and promising disproportionate spending. However, debt spending has accelerated rapidly in recent years. Trump cut taxes in his first term and signed the first coronavirus relief package in 2020, and Joe Biden followed suit with a $1.9 trillion stimulus package in 2021.
While this federal spending has helped stem the recession, it has also fueled inflation, which continues to weigh on American households and businesses.
Before taking office, Bessent said he wanted Trump to cut the deficit to less than 4% of gross domestic product by the end of his term, and said in August that the U.S. budget deficit had likely peaked.
The U.S. bond market has been hurt this year, with yields rising to multi-decade highs, as investors expect rising energy costs and heavy spending on AI to keep borrowing costs rising. The yield on the benchmark 10-year Treasury note was around 5.2% as of Wednesday, near its highest level since 2002.
The mountain of debt grows
Budget figures for the fiscal year ending September 30 have not yet been released, but the budget deficit is expected to exceed 6% of GDP, up from 5.8% in 2025.
“The government’s annual budget deficit has reached 6% of GDP, and by the end of today, and each day thereafter, the debt will increase by an additional $7 billion,” Ben Still, senior fellow and director of international economics at the Council on Foreign Relations, said in a Sept. 25 memo.
Steil also warned that the U.S. government could be “reckless” to declare the debt crisis resolved by endorsing unsubstantiated forecasts and pushing for spending and revenue reforms.
The IMF released its October World Economic Outlook on Tuesday, projecting U.S. growth of 2.3% in 2026 and 2027 and forecasting total U.S. government debt to reach 142% of GDP by 2031.
IMF Chief Georgieva also called on governments to develop credible medium-term plans to rein in budget deficits, rather than relying solely on strong growth, as global public debt is set to reach 100% of GDP by the end of 2010, the highest level since World War II. Bessent reportedly missed this week’s meeting to attend a “domestic event.”
