IMF steps up its warning to US over spending and ballooning debt
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The International Monetary Fund (IMF) has criticized US policymakers for their unsustainable fiscal policy, stating that the country's recent strong economic performance is driven by a fiscal stance that is out of line with long-term fiscal sustainability. The IMF warns that Washington's overspending risks reigniting inflation and undermining global fiscal and financial stability. US deficit spending has been fueled by Covid-related stimulus, investments in infrastructure and clean energy, and rising interest costs. Debt held by the public is projected to reach $45.7 trillion, or 114% of GDP by 2033. Treasury Secretary Janet Yellen has downplayed concerns, stating that debt sustainability should be measured by the cost to service debt as a percentage of GDP, adjusted for inflation. However, Yellen acknowledges that this forecast is vulnerable if interest rates remain elevated.



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