IMF Warns of Energy Shock, Debt and AI Risks to Global Growth

WASHINGTON — The global economy faces major risks from high energy prices, record public debt and the rapid growth of artificial intelligence (AI) investment, International Monetary Fund Managing Director Kristalina Georgieva warned on Wednesday. Her remarks came ahead of the IMF and World Bank annual meetings in Bangkok next week.

Georgieva said the global economy is being pulled in two directions. Conflicts in the Middle East are creating a negative shock to energy supplies, while the strong growth of AI investment is increasing demand and adding to inflation pressures. She also warned that the benefits of the AI boom are not reaching all countries equally. War-hit economies such as Ukraine and countries in the Gulf facing energy disruptions are expected to face some of the biggest growth downgrades in the IMF’s latest forecasts.

Public debt is another major concern. The IMF says global public debt is at its highest level since World War Two and is projected to exceed 100% of global GDP before 2030. Georgieva urged countries with high debt to adopt credible medium-term plans to strengthen their public finances. She also called for central banks to remain focused on controlling inflation and to maintain their independence from fiscal pressures.

Georgieva also highlighted risks linked to the huge investment in AI infrastructure. She warned that high expectations for AI companies could create financial risks if expected earnings fail to materialise. At the same time, she said AI could add about 0.5 percentage point to global growth each year if its development is managed properly. She urged governments to strengthen AI regulation, improve worker skills, support entrepreneurship and increase energy security to build stronger and more sustainable economies.