IMF warns of urgent fiscal action

The International Monetary Fund (IMF) has called on wealthy nations to make "urgent decisions" to stabilize their public finances, as outlined in its latest World Economic Outlook report. The report, released on October 13, highlights growing concerns over budget deficits, which are now the largest since the Covid-19 pandemic.

Global economic resilience near its limit

According to IMF chief economist Silvana Tenreyro, while the global economy has shown resilience, this strength is beginning to wane. Her comments were made during a press conference in Bangkok, where the IMF and World Bank are holding their annual meetings.

Growth projections revised upward

The IMF now forecasts global GDP growth at 3.1 percent for 2026, slightly higher than the 3 percent estimated in July. For 2027, the projection is 3.4 percent. These updates suggest a modest improvement in the global economic outlook.

Advanced economies face slower growth

Despite the overall positive revision, advanced economies are expected to grow more slowly, with 2.1 percent in 2026 and 1.8 percent in 2027. In contrast, emerging and developing countries are projected to grow faster, at 3.7 percent in 2026 and 4.4 percent in 2027.

High deficits and debt in major economies

The report also points out that both China and the United States have budget deficits reaching 8 percent of their GDP. Additionally, the debt of advanced countries is expected to hit 5.2 percent of GDP in 2026, the highest level since the IMF began tracking such data.