Bangkok:International Monetary Fund (IMF) Managing Director Kristalina Georgieva has warned of several risks threatening the global economy, including surging energy prices, unprecedented public debt, and the rapid expansion of AI investments. She called on governments to implement protective fiscal and monetary policies to mitigate these threats.
According to Qatar News Agency, Georgieva delivered her remarks in a speech ahead of the upcoming IMF and World Bank Annual Meetings in Bangkok. She highlighted that the world is facing a dual challenge: a negative energy supply shock due to conflicts and a positive demand shock from AI advancements, both contributing to rising inflation.
The impact of these forces is uneven worldwide, with the AI boom not benefitting all countries equally. Georgieva noted that the IMF's latest growth forecasts, to be presented at the Bangkok meetings, would show significant downgrades for economies affected by war, such as Ukraine, which has seen severe damage to its infrastructure.
She pointed out that oil prices remain at USD100 per barrel, with impaired refining capacity adding another USD100 in crack-spread margins for key products like diesel. Brent crude oil futures indicate that high oil prices will persist through 2027.
Rising energy prices are contributing to higher inflation, policy rates, and bond yields. Georgieva mentioned that 10-year sovereign bond yields in the United States, Germany, and Japan have reached their highest levels since 2007, 2009, and 1996, respectively, and continue to rise.