In October, the International Monetary Fund (IMF) released two new publications looking at global economic and fiscal conditions. Those reports evaluate the risks presented by rising levels of debt around the world.

IMF’s Fiscal Monitor October 2024: Putting a Lid on Public Debt discusses the risks of elevated levels of global debt, highlighting the large primary deficits in systemically important economies such as the United States’. The report calls for “fiscal policies to prioritize debt sustainability and rebuild fiscal buffers, now rather than later [as] . . . debt levels are higher than before the pandemic.” It continues: “There is no room for complacency. Risks surrounding debt projections are elevated and highly tilted to the upside.” Furthermore, the IMF writes that “now is an opportune time” to address the problem because of a combination of less restrictive monetary policy and healthy economic conditions.

A second report, World Economic Outlook: Policy Pivot, Rising Threats, finds that global economic growth is expected to remain “stable yet underwhelming.” In a blog post accompanying the report, the IMF emphasizes the importance of sound fiscal policy to support economic growth and stability. It argues that fiscal policy reform is one of three required policy pivots — along with cutting interest rates to achieve neutral monetary policy and improving productivity to create economic growth — that must occur globally: “Fiscal policy is a cornerstone of macroeconomic and financial stability. After years of loose fiscal policy in many countries, it is now time to stabilize debt dynamics. . . . [Delaying action] increases the risk of disorderly market-imposed adjustments.”

The IMF reports serve as a warning to all countries that global fiscal and economic conditions are veering into dangerous territory. In particular, the takeaways are particularly relevant for the United States, which is both the world’s largest economy and which is borrowing at a rate higher than the global average.