IMF Warns of Energy Pressures, Record Debt and AI Investment Risks to Global Economy
Kristalina Georgieva, Managing Director of the International Monetary Fund, warned of mounting threats to the global economy, including persistently high energy prices, unprecedented public debt levels and risks associated with the artificial intelligence investment boom. She urged governments to take preventive fiscal and monetary policy measures.
Speaking ahead of the annual meetings of the IMF and World Bank, Georgieva said the global economy was being shaped by two simultaneous forces: a negative energy supply shock caused by conflicts and a positive demand shock driven by the expansion of AI, which is also adding to inflationary pressures.
She highlighted the uneven impact of these forces across countries, noting that many economies are missing out on the AI boom and the growth opportunities it offers.
Georgieva said the IMF’s updated growth forecasts would show the largest downward revisions in economies severely affected by war, including Ukraine, which has suffered extensive damage to its civilian and economic infrastructure.
On energy, she noted that oil prices remained at around $100 per barrel, while constrained refining capacity was widening the gap between crude oil prices and those of major petroleum products, such as diesel. Brent crude futures, she added, pointed to elevated oil prices through 2027.
Georgieva stressed that rising energy costs were putting upward pressure on inflation, policy interest rates and bond yields. She noted that yields on 10-year sovereign bonds in the United States, Germany and Japan had reached their highest levels since 2007, 2009 and 1996, respectively, and continued to rise.
