The International Monetary Fund (IMF) warns of the significant risk posed by the U.S. budget deficit to global fiscal developments.

IMF economists highlight the profound effects of U.S. and Chinese fiscal policies on the worldwide economy, with challenges for fiscal projections globally. Last year, the U.S. saw a notable increase in its deficit, reaching 8.8 percent of GDP, with rising federal spending and declining tax revenues.

High interest rates have escalated financing costs for servicing the national debt. Concerns arise about inflationary pressures and long-term fiscal sustainability. Meanwhile, the global economy maintains resilience, with steady growth projected, although inflation risks persist. The IMF remains watchful of geopolitical tensions and their potential impact on oil prices.