Asheville, N.C., United States: International Monetary Fund Managing Director Kristalina Georgieva delivered the following remarks at the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina:
"I would like to thank the Government of the United States for hosting this week's G20 meeting, and Secretary Bessent and Chairman Warsh for their leadership in delivering a focused discussion on key global economic priorities.
During our discussions, there was a strong convergence of views around the importance of lifting potential growth everywhere. In a shock-prone and uncertain world, structural reforms and sound fiscal and monetary policies are essential to creating the foundation for stronger and better-balanced global growth. Beyond domestic responsibilities of policymakers, the G20 reminds us that international cooperation has a crucial role to play, especially in helping countries manage debt challenges, limit spillovers, and address global imbalances.
Global Economic Outlook
Since April, the global growth outlook for 2026 has firmed at around 3 percent. The global economy has absorbed the impact of the energy supply shock better than expected, through the use of oil and gas reserves, new sources of energy, and demand management measures. Surging AI investment-including in power projects to satisfy energy needs-is driving growth, in the US in particular, and in other economies integrated into the AI value chain, such as Korea.
But behind the averages there is significant divergence in economic fortunes and risks to the outlook remain high.
First, the energy shock is not over. The Strait of Hormuz remains largely closed, strategic oil and gas reserves will need restocking, AI drives up energy demand, and in the northern hemisphere winter is coming.
Second, public debt-at almost 100 percent of GDP worldwide-now exceeds its post-World War II highs and is set to climb further. Looking back, the debt trajectory resembles a staircase: big vertical steps when shocks occur, little or no reduction afterward.
Third, the disinflation process has stalled in many countries. Mounting fiscal pressures are pushing core bond yields upward and the interplay between fiscal and monetary policy worries markets.
Last, but not least, the future impact of AI on productivity and financial stability is dogged by unknowns.
The policy priorities are clear. Central banks must focus on their price stability mandate. Fiscal authorities must hammer out credible medium-term consolidation plans. Structural policies should concentrate on cutting red tape and removing self-inflicted barriers to growth-because stronger potential growth would help address the fiscal problem, and addressing the fiscal problem would help lift growth prospects.
Debt Challenges in Developing Countries
The sovereign debt landscape for emerging and low-income countries has gradually improved in recent years, thanks to domestic policy efforts and international cooperation. But progress has been uneven, and persistent risks and uncertainty in the global economy, including spillovers from the significant increase in yields in advanced economies, call for policy discipline and underscore the importance of building buffers.
The increase in global interest rates is of particular concern. As key advanced economy yields rise to multi-year highs, they lift most of the world's yield curves up with them. In some emerging markets this more than fully offsets hard-won spread compression.
High refinancing needs and rising debt-service costs are constraining many developing economies, in particular low‑income countries, limiting their capacity to finance critical spending on infrastructure, health, and education, which undermines growth and, in turn, debt sustainability.
These challenges are compounded by a sharp decline in net external financing, including cuts in official development assistance, and a marked reduction in new inflows from non‑Paris Club creditors.
Helping countries create fiscal space to support growth-enhancing spending is even more pressing in the current conjuncture.
Addressing these challenges requires a collective effort along three dimensions:
- First, decisive action is needed in countries where debt is unsustainable, supported by further improvements in restructuring processes. Important progress has already been achieved, particularly under the G20 Common Framework. The G20 MOU template agreed this year is part of this effort. The Global Sovereign Debt Roundtable has also advanced its work, with the publication in April of an updated "Restructuring Playbook" and important clarifications to facilitate implementation of comparability of treatment and inter-creditor group coordination. These efforts should continue, including developing solutions for countries not eligible to the Common Framework. We will continue to remain strongly engaged, including through greater use of our "good offices" and work under the GSDR.
- Second, accelerating the implementation of the IMF-World Bank Three-Pillar Approach to support countries with sustainable debt and pursuing strong growth-enhancing reforms is a key priority. Together with the World Bank, we have strengthened support for countries on reform implementation and domestic resource mobilization and continue to work on ways to encourage effective liability management operations, including to incentivize higher private sector inflows at lower cost. This has worked well in countries such as Ecuador or Pakistan. Securing strong support from other partners, including bilateral creditors, is essential. We count on the G20 to take leadership in this collective support to growth and investment.
- Third, there is no substitute for sound economic fundamentals. Helping countries build resilience and prevent unsustainable debt build-up is critical, including through strengthening debt transparency, debt management capacity, and debtor-investor relations.
Global Imbalances
Our latest External Sector Report shows that excess global imbalances-those not explained by fundamentals-widened further in 2025, by 0.7% of GDP, the largest increase in the past decade. This widening was broad-based, with major contributions coming from the two largest economies.
Excess imbalances in major economies can signal uneven growth patterns and macro-financial vulnerabilities. They can result in cross-border spillovers, trade tensions, and economic fragmentation. And this is what we have seen: the widening of excess global imbalances in recent years has taken place against a backdrop of ongoing trade tensions and shifts in the configuration of trade relationships across countries.
The message from Fund research is clear: since macroeconomic factors are the main drivers of imbalances, sustained rebalancing requires policy action in both surplus and deficit countries. In surplus economies, market-oriented structural reforms can boost domestic consumption, promote investment, and lift growth prospects. In deficit economies, appropriate fiscal consolidation can increase savings and help rebuild fiscal buffers. Simultaneous-mutually reinforcing-policies across major economies would yield the best outcomes, including for growth.
At the IMF we recognize our responsibility to support members in addressing imbalances.
- We are working with member countries and other international organizations to improve cross-country data and external sector statistics.
- We are continuing to refine our EBA methodology that underlines our assessment of excess imbalances. We have extended our analytical framework to better understand the linkages between trade and industrial policies and current account imbalances. We are advancing complementary work on capital flow and stock imbalances.
- Our Comprehensive Surveillance Review aims to deliver a more comprehensive and forward-looking assessment of external sector issues at the country level, as well as cross-country spillovers. The goal is to move from diagnosis to action.
The Fund is strongly committed to engaging with our members to address global imbalances. The G20 offers a unique platform to advance this dialogue, and we will continue to support our membership going forward."
