Australia and APEC countries are urged by the International Monetary Fund to increase revenue and cut spending to prepare for future economic shocks.

IMF managing director Kristalina Georgieva addressed leaders at the APEC summit in Lima, Peru.

She acknowledged the decline in global inflation but noted that many nations still feel its impact.

Georgieva stated that while the global economy is growing, the rate is slower than in previous decades.

High public debt is straining government budgets, and trade’s role as a growth engine is diminishing due to increasing protectionism and trade barriers.

She predicted over 3,000 new trade restrictions worldwide for the year.

Georgieva emphasized that fiscal consolidation and reforms are necessary for sustainable economic growth.

She recognized the unpopularity of these measures, especially among political parties that favor increased spending.

However, establishing sound fiscal rules is crucial for responsible government budgeting.

Reform is challenging but important for empowering citizens, she added.