IMF chief says world economy faces multiple risks despite resilience
NEW YORK: The world economy faces risks from stubborn inflation, higher debt service costs and investment in artificial intelligence (AI), although it has proven more resilient than many feared, according to International Monetary Fund (IMF) Managing Director Kristalina Georgieva, reported Xinhua.
The world economy faces multiple risks despite showing more resilience than expected, according to International Monetary Fund (IMF) Managing Director Kristalina Georgieva. Speaking at a special edition of the Qatar Economic Forum in New York City, Georgieva highlighted inflation, higher debt service costs, and investment in artificial intelligence (AI) as potential challenges.
She noted that many central banks are tightening monetary policy due to persistent inflation, which is proving difficult to resolve. Georgieva emphasized the need for fiscal consolidation but expressed concern that not enough action is being taken. She also warned about potential risks from leverage and circular financing in AI investment, particularly from high expectations that may be unmet.
Georgieva highlighted that the main concentration of AI financing risk is in the United States, while other players in Asia and Europe are part of the AI supply chain. The IMF's new projections for the world economy, set to be released in October, will reflect the continued high risks. Despite the challenges, Georgieva sees grounds for optimism in the rapid actions taken to address energy supply shocks.
While the world appears less unified, she stressed that we remain interdependent and cooperate. Georgieva cautioned that risks are high and uncertainty is now the norm.
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