IMF: Global Economy Faces Various Risks Despite Showing Resilience

New York City (ANTARA) - The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, believes that the world economy is facing risks due to difficult-to-tame inflation, increasing debt servicing costs, and artificial intelligence (AI) investments, even though the global economy has proven more resilient than many feared.

“Inflation is difficult to curb. We do not anticipate a quick solution. And that means many central banks must tighten (policy),” said Georgieva during a special edition dialogue of the Qatar Economic Forum in New York City, USA, on Sunday (20/9).

According to Georgieva, efforts to maintain price stability also increase the costs and difficulties of debt servicing. She noted that while there is widespread understanding regarding the need for fiscal consolidation, the actions taken so far have not been sufficient.

She also highlighted potential risks arising from the use of leverage and circular financing in AI investments, stating that this is something that must be monitored closely.

“If AI disappoints because of our high expectations—if those expectations are not met—that disappointment has the potential to cause shocks to the system,” said Georgeyva.

She assessed that the risks in AI financing are primarily concentrated in the US, while many other players in Asia and Europe are involved in the AI supply chain.

According to Georgieva, the IMF’s new projections for the world economy, to be released in October, will reflect the fact that risks remain high.

“Maintaining growth at around 3 percent is an extraordinary achievement, considering all the shocks we have experienced,” she remarked.

Georgieva stated that she sees optimism from the extraordinary actions taken swiftly when necessary to address energy supply shocks.

“Meanwhile, there is much talk about a fragmented world, and indeed the world is currently less united. However, this world remains a place where we are interdependent and work together,” said Georgieva.

“We must be careful and vigilant. The risks are high and uncertainty is the new normal,” she concluded.