Policy Actions Can Reinforce Growth Progress in Many G20 Economies
IMF Blog, November 19, 2025
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Bibliographic details
- Authors: Nicolas Fernandez-Arias, Shushanik Hakobyan
- Published: November 19, 2025
Overview and context
- Since the Group of Twenty’s foundational Pittsburgh conference in 2009, progress toward its goal of strong, sustainable, balanced, and inclusive growth has been modest.
- Medium-term growth prospects for the G20 have moderated to just 2.9 percent, described as the weakest since the global financial crisis.
- G20 members account for about 85 percent of global economic output.
- Public debt rose to a record 102 percent of GDP last year.
- Excessive external imbalances are widening again.
Recent positive developments
- A survey of IMF country teams indicates many G20 economies made progress toward stronger growth, including more than half of emerging market economies.
- Improvement has been substantial in some cases, such as Germany, where growth momentum was supported by reforms to fiscal rules.
- Falling inflation and fiscal consolidation efforts are improving the sustainability of growth for most G20 advanced economies and half of the European Union.
Outstanding weaknesses: balanced and inclusive growth
- Balanced growth remains elusive across the G20:
- Moderate deterioration was assessed in China and the United States because of widening excess current account balances.
- Inclusive growth improved only slightly, particularly in G20 advanced economies and in the African Union (which joined the group in 2023).
Policy priorities and reform sequencing
- Smart fiscal policy is central: governments need to rebuild fiscal buffers to contain rising debt while meeting growing spending needs.
- Fundamental economic (structural) reforms are needed to aid domestic rebalancing and foster stronger growth.
- IMF country teams identified measures with the highest expected growth impact to guide prioritization and sequencing:
- Reforms to labor market institutions consistently ranked among the highest-impact measures across the G20 and in the European Union.
- Improved fiscal policies and business regulations also consistently ranked highly.
- For African Union members, the largest potential gains lie in foundational governance improvements and fiscal reforms.
Simulated impacts of concerted reform and macroeconomic policies
- Implementing the identified highest-impact structural reforms, alongside recommended macroeconomic policies, could raise growth across the group by about 7 percentage points cumulatively over the next decade.
- This cumulative gain would benefit emerging market economies the most.
- Debt burdens would decline by more than 8 percentage points of GDP within five years for countries with limited fiscal space, reflecting the combined impact of recommended fiscal adjustments and structural reforms.
- Concerted reform efforts would also support domestic rebalancing by helping narrow current account balances, with large improvements possible for both major surplus and deficit economies.
This blog is based on the 2025 G20 Report on Strong, Sustainable, Balanced, and Inclusive Growth, prepared by IMF staff. For additional information, see also the new SSBIG dashboard.
Content in this bundle
- G20 Report on Strong, Sustainable, Balanced, and Inclusive Growth.