The International Monetary Fund has warned advanced economies to start cutting spending and rein in huge national debts starting next year.
John Lipsky, the IMF's first deputy managing director, said stimulus spending can continue in 2010 to drive the global economic recovery.
But he warned that wealthy nations must cut spending, increase tax revenues and reform the pensions and health benefits systems from 2011.
"Addressing this fiscal challenge is a key near-term priority, as concerns about fiscal sustainability could undermine confidence in the economic recovery," Lipsky told the China Development Forum in Beijing.
"Already in several countries with particularly high debt and deficits, sovereign risk premia have risen sharply, imposing strains for the countries affected and raising risks of possible broader spillovers," he said.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.