IMF chief says world economy faces multiple risks despite resilience
Speaking in a dialogue at a special edition of the Qatar Economic Forum in New York City on Sunday, Georgieva said, "Inflation is stubborn. We are not anticipating a quick resolution. And that means that many central banks have to tighten."
Kristalina Georgieva, the International Monetary Fund (IMF) managing director, warned that the world economy faces multiple risks despite its demonstrated resilience. During a dialogue at the Qatar Economic Forum in New York City, Georgieva highlighted persistent inflation, increased debt service costs, and potential risks from AI investment as the primary concerns.
Inflation remains stubborn, and central banks are expected to continue tightening monetary policy. Georgieva emphasized that achieving price stability is a challenging task, requiring fiscal consolidation efforts, though insufficient progress has been made. Furthermore, she cautioned about the potential risks associated with leverage and circular financing in AI investment, which could have a significant impact on the global system if AI expectations are not met.
The risks related to AI financing are primarily concentrated in the United States, while other players in Asia and Europe are involved in the AI supply chain. Georgieva noted that the IMF's outlook for the global economy, set to be released in October, will reflect the ongoing risks, with growth expected to hover around 3 percent, a significant achievement considering the numerous shocks experienced.
Despite the fragmented world, Georgieva pointed out that interdependence and cooperation still prevail, and the global economy must remain vigilant and cautious, as uncertainty has become the new normal.
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