The International Monetary Fund urged governments to strengthen public finances as borrowing costs rise, while separate U.S. and French forecasts show fiscal strain without establishing which Group of Seven member faces greater risk.
By September 2026, the G7’s average 10-year sovereign borrowing rate had moved more than 1 percentage point above its February level, according to the IMF. The September reading marked a high not reached for almost 20 years; EconoTimes previously covered the G7 yield increase. The fund said high debt burdens increase how sharply deficits and debt respond to higher borrowing costs.
Financial Times columnist Chris Giles has argued that France and the United States face serious fiscal problems within the G7. IMF figures point to pressure in both countries, though they come from different forecast rounds.
The IMF’s April 2026 U.S. consultation put gross government debt at 125.8% of gross domestic product and the general government deficit at 7.5% for that year. It projected gross debt would reach 141.5% of GDP by 2031. The consultation urged Washington to begin fiscal adjustment early, including by raising federal revenue and changing entitlement programs.
In its October 2026 World Economic Outlook, the IMF forecast French gross debt at 118.5% of GDP and the deficit at 5.4% for 2026. It put French economic growth at 0.4% that year. Although the cited U.S. deficit is higher, the April and October estimates do not provide a direct, same-round comparison.
At an Oct. 14 briefing in Bangkok, IMF Managing Director Kristalina Georgieva called for stronger revenue, managed spending and better public financial management. “Make urgent repairs to the fiscal house before the cracks widen,” she said. The IMF did not forecast an imminent crisis or name a G7 economy as the bloc’s most vulnerable.
At a separate Fiscal Monitor briefing, Rodrigo Valdes, director of the IMF’s Fiscal Affairs Department, said fiscal indiscipline in major advanced economies can affect other countries. “It travels to the rest of the world,” he said. The IMF’s July review of France also flagged political uncertainty ahead of the 2027 presidential election as a downside risk.
