IMF Chief Says Risks From Rising Debt, Inflation Not Over

By Fabiana Negrin Ochoa

While the global economy has absorbed the energy supply shock better than expected, it's not over, and risks from rising debt and inflation remain high, said the head of the International Monetary Fund.

Speaking at the conclusion of the Group of 20 summit of financial leaders, IMF Managing Director Kristalina Georgieva flagged the increase in global interest rates as a 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," she said.

The remarks come as global bonds sell off, sparked by fresh inflation concerns as a re-escalation of the U.S.-Iran conflict pushing oil prices higher. Yields have surged in the U.S., U.K., Japan and Europe, sending government borrowing costs soaring and adding to anxiety about debt sustainability.

In her speech, Georgieva said public debt now exceeds post-World War  II highs at almost 100% of gross domestic product worldwide, and is set to climb further.

Those debt problems are set against a challenging geopolitical backdrop, with fighting in the Middle East hobbling oil flows via the critical Strait of Hormuz shipping route.

The strategic oil and gas reserves used to manage the energy shock will need restocking, Georgieva said, an issue that becomes more acute as artificial-intelligence drives up energy demand. And in the northern hemisphere, she added, winter is coming.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

September 01, 2026 23:19 ET (03:19 GMT)