IMF chief warns of overlapping risks to global economy

International Monetary Fund Managing Director Kristalina Georgieva has warned that the global economy, despite showing resilience, faces a web of risks led by persistent inflation, rising debt servicing costs, and challenges linked to artificial intelligence investments.

Speaking at the Qatar Economic Forum in New York, Georgieva noted that inflation remains stubbornly high and is unlikely to be resolved quickly, prompting many central banks to tighten monetary policy.

She explained that the fight to stabilize prices has also increased the cost and difficulty of servicing debt, stressing the importance of fiscal discipline, but noted that policy implementation is not keeping pace with the required understanding.

AI risks and uncertainty

Georgieva highlighted the risks associated with AI investments, emphasizing the need for maximum vigilance. She warned that disappointment in high expectations for AI could shock the global financial system, especially as financial risks are concentrated in the United States, while Asia and Europe continue to play key roles in the global supply chain for this technology.

Georgieva also indicated that the IMF's upcoming report in October will reflect that risks remain elevated, describing economic growth of around 3% as a significant achievement in the face of successive shocks.

She expressed optimism about the speed of response to energy shocks when necessary, but urged caution, noting that uncertainty has become the defining feature of the current global economic situation.