IMF Warns: Rising Sovereign Debt Creates Stagflation Vulnerability

An IMF blog post titled 'Debt Confronts Policymakers With Difficult Trade-offs' warned that rising sovereign debt across advanced economies — with the US at ~124% debt-to-GDP and Japan at ~250%+ — creates stagflation-like vulnerabilities. Fiscal space to respond to downturns is limited, and high debt levels can amplify the inflation impact of supply shocks like tariffs. The IMF called for medium-term fiscal consolidation plans without choking near-term growth.