IMF tells advanced economies to cut debt as costs rise — SkimNews
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- Kristalina Georgieva urged advanced economies to "bring debt levels down" and prioritize fiscal consolidation while central banks deliver on price stability, calling for "courage" to take "politically tough steps"
- UK borrowing totaled £18.3bn ($24.4bn) in August — nearly a fifth higher than the prior year and above official forecasts — with August debt interest the highest for that month since records began in 1997
- US national debt has surpassed $40tn, doubling within the space of a decade and prompting concerns both at home and abroad
- AI systems could pose a "significant financial stability risk" if they "take [on a] life of [their] own," Georgieva said, adding that large tech firms raising capital for AI are now competing in the bond market and pushing yields higher
- Georgieva said the UK's position was "not very different" from other advanced economies but praised "fairly consistent action" on debt reduction and pointed to planning and housing reforms
- Gulf energy exports must "resume in a durable manner" for the energy supply shock to move into the "rearview mirror," Georgieva said, framing it as a "very significant step to normalisation"
Why it matters: With UK borrowing running nearly 20% above the prior year and US debt having doubled in a decade to $40tn, the IMF's call for fiscal consolidation lands directly before UK PM Andy Burnham's first Budget next month — putting explicit political pressure on tax and spending decisions in advanced economies already squeezed by energy-driven inflation.
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