The International Monetary Fund (IMF) has urged countries to address excessive global trade imbalances, warning that widening economic disparities among major economies threaten global growth and stability.

The IMF Managing Director, Kristalina Georgieva, said this while speaking on the Global Economy at the 2026 IMF/World Bank Group Annual Meetings in Bangkok on Thursday.

According to her, countries should maintain balance between what they export and what they import.

She stated, “We do not want situations in which one country exports almost everything while another imports excessively and accumulates capital flows that reflect this imbalance. When these differences become excessive, they create problems.”

Ms Georgieva said China and the United States accounted for much of the growing imbalance, with China’s high exports and low domestic consumption contrasting with America’s low savings, high debt and large fiscal deficits.

 She said countries needed to correct excessive differences between exports and imports to prevent distortions that could undermine economic growth, particularly in developing economies.

According to her, China’s export-driven economic model and insufficient domestic consumption have contributed to the imbalance, while the United States faces the opposite challenge of inadequate savings and rising public debt.

The managing director added that some European countries also faced challenges arising from insufficient investment and weak productivity growth.

“The question is whether we can also find a path to reduce and eliminate excessive imbalances,” Ms Georgieva said.

Ms Georgieva explained that when such imbalances became excessive, they created problems for the wider global economy, making it difficult for developing countries to build competitive industries.

According to her, countries with less-developed manufacturing capabilities can struggle to compete against major economies whose production advantages have been built over many years.

She also noted that capital flows into highly attractive economies could create difficulties for other countries when the global economic system remained unbalanced.

Ms Georgieva, however, expressed optimism that the problem could be resolved, citing growing recognition among policymakers of the need to address the issue.

“I am more optimistic today than I was a year ago that this is a solvable problem,” she said.

The IMF boss also stressed the importance of restoring fiscal discipline, reducing debt and implementing structural reforms to strengthen economic resilience.

She cited Greece and Argentina as examples of countries that had learnt difficult lessons about excessive spending and subsequently pursued fiscal discipline and reforms.

Ms Georgieva lamented that governments often delayed necessary reforms until economic difficulties had already emerged.

(NAN)