IMF warns on US debt

The International Monetary Fund (IMF) emphasizes the urgent need for the United States to address its escalating debt levels, despite acknowledging the country's strong economic performance. IMF Managing Director Kristalina Georgieva urges policymakers to focus on reducing the public debt-GDP ratio through measures like tax increases and entitlement program cuts. While the U.S. economy has excelled, high deficits and debt pose risks that could impact global financial stability, requiring a multi-year fiscal adjustment. Georgieva highlights the importance of starting the process now to mitigate future economic threats, recommending a credible medium-term fiscal adjustment to prioritize budget programs and reform income taxes. The IMF also suggests raising taxes to curb rising debt levels while acknowledging the robust growth in the U.S. economy and progress in controlling inflation.