Germany slashed fuel taxes for two months, a move that will cost $1.9 billion, while Canada announced a similar cut on gasoline, diesel and aviation fuel through early September, tallying $1.7 billion in relief. Italy, Australia and Greece have also extended or expanded tax breaks, adding roughly $590 million, $285 million and $354 million respectively. These measures lift household budgets but swell emergency spending as the Middle‑East conflict drags on.

The IMF warned that the surge in subsidies pushes many governments toward unsustainable debt, noting global public debt already sits at 94 % of GDP and could hit 100 % by 2029. Deficits remain high, interest bills are climbing and Europe faces added strain from defense spending and the transition to low‑carbon energy. Investors are already pricing higher borrowing costs, as seen in Britain’s 10‑year yield near 5 %.

Finance ministers from Britain, Australia, Japan and about a dozen other nations met Wednesday, pledging “coordinated, responsible” aid focused on the most vulnerable. Yet the call for temporary, targeted support clashes with political pressure to extend relief, risking a fiscal crunch that could tighten credit markets. Policymakers now must balance immediate assistance against the threat of a debt‑driven slowdown.