WASHINGTON, April 17. /TASS/. Most countries must take decisive fiscal measures in connection with the growth of the debt burden, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva stated in her speech on Thursday.
"Economies face the new challenges from a weaker starting position, with public debt burdens that are much higher than just a few years ago, she said speaking at the fund ahead of the spring meeting of the governing bodies of the IMF and the World Bank, which will be held next week.
"As such, most countries must take resolute fiscal action to rebuild policy space, setting out gradual adjustment paths that respect fiscal frameworks," she noted.
Georgieva allowed for the situation when certain countries "may experience shocks necessitating renewed fiscal support," and such measures "should be targeted and temporary."
According to her, "emerging market economies should preserve exchange rate flexibility as a shock absorber."
As for countries with unsustainable public debt they should move proactively to restore sustainability, including in some cases by taking the difficult decision to seek debt restructuring, she noted.
According to Georgieva, compromises in fiscal policy can be partially offset by increasing growth potential through "reforms in banking, capital markets, competition policy, intellectual property rights, and AI preparedness."
She also noted that countries need to pay attention to eliminating " internal and external macroeconomic imbalances." According to her, "rebalancing can enhance stability internally, externally, and globally.".