IMF Fiscal Chief: U.S. Debt Sustainable, But Fiscal Consolidation Needed

Jibran Munaf
Jibran Munaf

Image: Jo Yong-Hak, Reuters | Reuters Images

The United States’ current debt trajectory remains sustainable despite steady growth, according to Vitor Gaspar, the International Monetary Fund’s (IMF) Fiscal Affairs Director. Speaking at a press conference on Wednesday, Gaspar emphasized that while the U.S. benefits from robust economic growth and favorable financial conditions, it is now time to start addressing fiscal imbalances.

Gaspar acknowledged that the U.S. debt is increasing by roughly two percentage points of GDP each year, a pace that cannot continue indefinitely. However, he expressed confidence in the ability of U.S. policymakers to manage the situation.

“We believe the situation in the United States is sustainable because policymakers have access to a wide range of policy instruments that will allow them to bring public debt under control,” Gaspar noted.

He called for fiscal consolidation measures, urging policymakers to take advantage of the current economic environment to ensure long-term debt sustainability.