Debt is Higher, Rising Faster | Reinvigorating Domestic Reforms is Crucial, Says Georgieva at CESEE Gathering | Country Focus: Ethiopia

In today's edition, we highlight:

• Debt is higher and rising faster in countries which account for 80 percent of the global economic output
• Reinvigorating domestic reforms is crucial, says Georgieva at CESEE gathering
• Country Focus: Ethiopia
• F&D magazine: Leah Boustan on debunking myths
• IMF MENA Annual Research Conference, and more

PUBLIC DEBT

Debt is Higher and Rising Faster in 80 Percent of Global Economy

Global public debt could increase to 100 percent of global gross domestic product by the end of the decade if current trends continue, according to projections in the IMF’s latest Fiscal Monitor. The rising ratio of public debt to GDP reflects renewed economic pressures as well as the consequences of pandemic-related fiscal support. This trend raises fresh concerns about long-term fiscal sustainability as many countries face rising budget challenges, write the IMF’s Era Dabla-Norris and Davide Furceri in a new blog.

A new Chart of the Week shows that about a third of countries, accounting for 80 percent of global GDP, have public debt that’s both higher than it was before the pandemic and rising at a faster pace. More than two-thirds of the 175 economies in the study now have heavier public debt burdens than before COVID spread in 2020.

Public debt’s evolution over the past five years diverges widely across countries, which means fiscal policy must vary in line with country‑specific factors and circumstances. However, given the uncertain times that may lie ahead amid high trade policy tensions, countries everywhere will need much greater resilience, the authors say.

For additional information, see the Fiscal Affairs Department’s April 23 blog and press briefing.

CENTRAL, EASTERN, AND SOUTHEASTERN EUROPE

Reinvigorating Domestic Reforms is Crucial, Says Georgieva at CESEE Gathering

The Central, Eastern, and Southeastern European (CESEE) region is at a crossroads, faced with structural headwinds and a much more volatile external environment. Reinvigorating domestic reforms is now essential—both to navigate the stormy seas of trade tensions and uncertainties and to unlock the region's potential to sail faster, said IMF Managing Director Kristalina Georgieva in her opening remarks at a high-level conference in Dubrovnik, Croatia.

“Standing still, taking shelter, and hoping the storm will pass is not a plan. It would be much wiser to assume that many of the shifts we see are here to stay, and to act accordingly,” said Georgieva.

She pointed to three critical priorities for CESEE countries: steering a steady course in terms of macroeconomic policy—monetary and fiscal policies for stability; getting the ship into better working order so it can sail forward faster—structural policies for growth; and integrating more deeply into and within the single market of the EU. 

COUNTRY FOCUS

Ethiopia’s Central Bank: Leading Transformative Reform

Over the past year, Ethiopia—Africa’s second most populous country—has embarked on a comprehensive transformation of its monetary and exchange rate regimes. After decades of tight control, the country has liberalized the foreign exchange regime, adopted a more flexible exchange rate, moved to an interest rate-based monetary policy, and ended central bank financing of government. In parallel, the National Bank of Ethiopia (NBE) is updating its legal framework and internal organization. 

These reforms aim to address acute foreign exchange shortages and inflation, creating conditions for high, sustainable growth. The authorities are also tackling budgetary constraints, financial vulnerabilities in state-owned enterprises and state-owned banks, and a sovereign debt restructuring while mitigating social impacts and managing humanitarian pressures. The IMF is supporting Ethiopia’s reform efforts through a four-year $3.4 billion Extended Credit Facility Arrangement.

During the 2025 IMF-World Bank Spring Meetings, Mamo Mihretu , Governor of the National Bank of Ethiopia discussed these key reforms with Abebe Aemro Sélassié , Director of the IMF’s African Department. Read more about their conversation in a new Country Focus article.

Watch the video.

F&D MAGAZINE

Leah Boustan on Debunking Myths

Long before she became an economic historian, Leah Platt Boustan’s family lore shaped her beliefs about immigration. When she was in high school, she flew from Boston to Chicago with her father to interview her great-uncle Joe about the family’s roots. Their interest in genealogy was spurred by the film director Stephen Spielberg’s interviews with Holocaust survivors in the mid-1990s.

Leah and her father set up a camcorder on a tripod and listened to her great-uncle describe how his father, who immigrated to the United States from Russia in 1891, got his start selling goods from a pushcart and eventually opened his own store. Uncle Joe, the youngest of eight children, became a lawyer, fulfilling the American dream of upward mobility.

The story reinforced Boustan’s initial view that, once upon a time, immigrant families quickly climbed the socioeconomic ladder, but that progress is much slower for today’s immigrants. Yet when she and eventual collaborator Ran Abramitzky started analyzing decades of US census data to trace the fortunes of immigrant families across generations, they realized that the children of recent arrivals from Guatemala or Nigeria do just as well as those who came from Italy, Norway, or Russia in the 19th century.

Read the Article

MIDDLE EAST AND NORTH AFRICA

IMF MENA Annual Research Conference Wrap up

The inaugural IMF MENA Research Conference, co-hosted by the International Monetary Fund and the American University in Cairo on May 18–19, 2025, concluded with a strong call for coordinated, evidence-based policy responses to the region’s economic challenges. The event brought together policymakers, academics, and thought leaders to discuss economic topics of regional and global relevance.

Day one (see recording) addressed fiscal policy, inflation, financial stability, and industrial policy, with remarks from IMF’s Jihad Azour, AUC’s Ahmad Dallal, and a keynote by Anne Krueger. Day two (see recording) focused on the green transition, AI, and the future of work, and included a closing high-level panel moderated by IMF Deputy Managing Director Nigel Clarke.

IMF PODCAST

While the German economy has been one of Europe’s strongest for decades, its performance in recent years has fallen short of expectations. Why is this once economic powerhouse now lagging? Ulrike Malmendier is a professor of economics and finance at the University of California, Berkeley, and serves on the German Council of Economic Advisors to the German government. In this podcast, Malmendier says an aging population and a lack of workers are contributing to the country’s economic woes. 

Thank you again very much for your interest in the Weekend Read! Be sure to let us know in the comments what issues and trends we should have on our radar.

Miriam Van Dyck

Editor, IMF Weekend Read