Tokyo – Japan | September 24, 2025
IMF Officials Warn of Global Debt Risks at Tokyo Conference
At a high-level conference in Tokyo today, the International Monetary Fund (IMF) brought together policymakers and experts to address pressing global economic challenges, focusing on building resilience and managing the mounting risks from global debt. IMF officials warned that despite a recent period of “tenuous resilience” in the global economy, underlying weaknesses and growing debt burdens could amplify risks, especially for developing countries.
Headline Points
* The IMF’s Fourteenth IMF-Japan High-Level Tax Conference focused on how countries can build fiscal resilience through better spending and revenue collection.
* IMF Deputy Managing Director Kenji Okamura warned that the global economy’s recent resilience is due to “temporary factors,” not fundamental strength, and that a slowdown could amplify existing debt risks.
* The conference highlighted the need for countries, particularly in Asia, to improve tax-to-GDP ratios, with IMF research suggesting a minimum of 15 percent is needed to boost economic growth.
* Discussions also focused on how rising interest rates, geopolitical tensions, and increased defense spending are straining public finances and limiting countries’ ability to fund critical development.
* The conference is a key part of the IMF’s ongoing efforts to help countries navigate a complex fiscal landscape and avoid a potential debt crisis.
The Resilience Paradox
In his opening remarks, IMF Deputy Managing Director Kenji Okamura praised the global economy’s ability to withstand recent shocks, but cautioned that this resilience is “tenuous.” He noted that the global economy has so far proven robust against factors like higher tariffs and geopolitical tensions, but warned that “there are now signs of a slowdown.” This slower growth, he explained, could dangerously amplify debt risks at a time when debt levels are already at record highs.
Okamura’s comments came just as the IMF’s 2025 Annual Report, titled “Getting to Growth in an Age of Uncertainty,” was released. The report echoes the conference’s themes, highlighting the need for member countries to take proactive steps to promote growth and ensure financial stability.
The Debt and Revenue Challenge
A central theme of the conference was the pressing issue of sovereign debt, particularly in the developing world. Okamura noted that many countries are “struggling with high interest costs and refinancing needs,” which severely limits their ability to finance essential public services and development spending. This issue is compounded by intensifying spending pressures from defense needs, an aging population, and technological changes.
The IMF presented new research at the conference, which found a “tipping point” for tax-to-GDP ratios. The research indicates that countries need to achieve a tax-to-GDP ratio of at least 15 percent to see a significant increase in economic growth and an improvement in government effectiveness. The conference explored practical strategies to help countries achieve this target, including leveraging technology for public finance operations and reforming international taxation.
Navigating a New Fiscal Landscape
The discussions in Tokyo served as a prelude to the IMF and World Bank’s annual meetings scheduled for October in Washington, D.C. The IMF is positioning itself as a key partner for countries grappling with fiscal challenges. The conference provided a platform for peer-to-peer learning and a space for experts to share insights on how to manage fiscal policy in an environment of high uncertainty.
The consensus from the discussions was that while there is no single solution to the global debt challenge, a combination of stronger institutional frameworks, improved spending composition, and greater international cooperation will be essential to building a more resilient and sustainable future.
