rki.news | Source: Anadolu Agency
International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Wednesday urged governments to strengthen public finances, warning that the global economy’s resilience to repeated shocks was nearing its limits.
Speaking at the IMF-World Bank annual meetings in Bangkok, Georgieva said inflation, rising interest rates and energy pressures were depleting economic buffers and increasing debt-servicing costs.
Global economic growth is projected at 3.1% in 2026, below last year’s 3.4%, she said.
The outlook reflects conflicting pressures, including energy supply disruptions caused by the Middle East war and growing demand for artificial intelligence (AI). Economies benefiting from AI supply chains and energy exporters unaffected by conflicts were performing better, while low-income countries and energy importers faced mounting challenges.
Georgieva said government bond yields in advanced economies had reached multidecade highs, raising borrowing costs for emerging markets.
Debt-servicing costs in low-income countries have risen from 6% of government revenues a decade ago to 14%, she added.
She urged governments to increase revenues, streamline spending and improve public financial management. Support for households facing higher food and energy costs should be temporary and targeted at vulnerable groups.
Central banks should prioritize price stability, tightening monetary policy where inflation exceeds targets and economic activity remains strong.
Addressing global imbalances, Georgieva urged China to boost domestic consumption, the United States to increase savings and reduce deficits, and Europe to strengthen investment.
She warned that disappointing AI returns could trigger market corrections, while AI-enabled cyberattacks threatened financial stability.
IMF Chief Urges Governments to Strengthen Public Finances
