IMF Managing Director Kristalina Georgieva said this week that supercharging U.S. economic growth will not, on its own, solve the country's $40 trillion debt problem, pushing back on the argument championed by Treasury Secretary Scott Bessent that America can outgrow its fiscal imbalances.

Speaking during the IMF's annual meetings in Bangkok, a forum that brings together the fund's member countries to discuss the global economy, Georgieva acknowledged that growth can ease the U.S. debt burden but said it is not a catch-all fix. "Growth, of course, helps, but it cannot deliver fast enough the necessary adjustments," she said, adding that the budget deficit must also come down.

The Treasury Department pushed back against Georgieva's warning by questioning the IMF's forecasting record. "When we see pieces on the IMF, it's good to remember how messy their forecasts have been in the past," David Zervos, counselor to Treasury Secretary Scott Bessent, said in a statement to Fortune. Zervos pointed to rosy economic predictions made before the 2008 Global Financial Crisis and the 1997 Asian financial crisis as evidence. The IMF did not immediately respond to Fortune's request for comment.

The exchange frames the central question hanging over U.S. fiscal policy: whether faster growth can narrow the gap between what Washington spends and what it collects, or whether deficit reduction will be required alongside it.

A record debt load

Georgieva's comments come at an uncertain time for the U.S. fiscal situation. According to Treasury data, the national debt stands at $40.3 trillion — a record high and the largest in the world.

Even more worrying to experts is the U.S. gross debt-to-GDP ratio, which stood at about 126%, according to the Treasury Department. Publicly held debt is lower, at 100% of GDP, but is still the highest since shortly after World War II ended, according to the Committee for a Responsible Federal Budget.

A growing economy can make existing debt easier to manage. But if Washington keeps borrowing faster than the economy expands, the debt-to-GDP ratio can continue rising even when the economy grows. The mounting debt also means a greater share of government revenue goes toward interest payments instead of other priorities like public services. Net interest payments made up about 15% of federal spending in fiscal 2026 — and about 20% of revenue.

By fiscal 2031, the Committee for a Responsible Federal Budget has predicted, the average interest rate on federal debt will exceed the economy's rate of growth — a predicament that could contribute to a self-reinforcing "debt spiral" and eventually require more drastic spending cuts or tax increases to correct, Fortune previously reported.

'We can grow our way out of that'

Bessent, for his part, has argued that consistent U.S. economic growth of 3%, fueled partly by AI, can be enough to deal with the issue. "There's nothing magic about the $40 trillion number," he told CNBC in August. "And we can grow our way out of that."

Whether growth alone can actually solve the federal debt problem, however, is doubtful. An article published last month by the Council on Foreign Relations explained that annual 3% economic growth is hard to achieve. The U.S. has reached the 3% mark in only five calendar years, the most recent being 2019, during President Donald Trump's first term. U.S. GDP is estimated to grow 2.2% this year, up from 2% GDP growth in 2025.

Congressional Budget Office Director Phillip Swagel also recently warned that it is "probably not plausible" that growth will stabilize the U.S. financial trajectory, explaining that real GDP growth would have to hit 5% to 6%. Instead, changes in revenue and spending are necessary, he noted.

To be sure, Bessent has said he and White House budget director Russell Vought are working with Trump on a broader deficit-reduction plan, but details have yet to be released. When they arrive, the plan will offer a concrete reference point for measuring the administration's growth-first approach against the arithmetic laid out by the CBO and outside analysts.

The IMF has previously sounded the alarm about the U.S. debt problem. In an annual review of the U.S. economy published in April — part of the fund's regular Article IV assessments of its member economies — the organization acknowledged the strength of the U.S. economy. Still, the IMF's executive directors said in the report that the growing debt could be a problem not just for the U.S., but for the rest of the world.

"They emphasized that the fiscal trajectory creates a growing financial stability tail risk for the U.S. and for the global economy, given the importance of the U.S. Treasury market for the global financial system," the report stated.

This story was originally featured on Fortune.