IMF chief urges advanced economies to cut debt as borrowing costs surge

September 23, 2026 at 04:01 AM2 min

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IMF Managing Director Kristalina Georgieva called on advanced economies including the UK and US to cut borrowing and reduce debt levels at the UN General Assembly in New York. She said global shocks have pushed debt up 'like a staircase not to heaven' while governments took no action to contain service costs. Her warning comes as government borrowing costs surge on oil supply disruptions and AI-driven bond market competition.

Key Facts

IMF Managing Director Kristalina Georgieva said advanced economies need to cut borrowing and reduce debt levels following weeks of spiralling government interest costs.
The US debt pile has surpassed $40tn, doubling within a decade.
Georgieva said the IMF's message to advanced economies is to bring debt levels down, put fiscal consolidation as a priority, and ensure central banks deliver on price stability.
Georgieva warned that if AI takes on a life of its own, the world could face a significant financial stability risk.

Debt Warning

Kristalina Georgieva issued the warning at the UN General Assembly in New York City. She said global economic shocks had been 'pushing debt levels up like a staircase not to heaven' but governments had taken 'no action to contain that service cost'. Georgieva said it is time to take action and that courage is needed by politicians to take the necessary steps.

Borrowing Cost Surge

Government borrowing costs have surged in response to wars disrupting the supply of oil, which has fuelled inflation. Higher global borrowing costs have hit the UK government in the run-up to Prime Minister Andy Burnham's first Budget next month. The US, the world's largest economy, has seen its debt pile surpass $40tn, doubling within a decade.

AI Financial Risk

Georgieva said increasing competition in the bond market from large tech companies raising money for AI development is pushing yields up. She warned that if AI takes on a life of its own, the world could face a significant financial stability risk.