IMF chief warns energy shock, growing debt and AI risks threaten global growth

Georgieva said the global economy was caught between a negative energy supply shock linked to Middle East conflicts and a positive AI demand shock that is also fuelling inflation. The biggest growth downgrades in new IMF forecasts are expected in economies ravaged by war, including Ukraine and Gulf countries hit by Iranian strikes and sharply reduced energy exports. She did not indicate whether the IMF would change its overall 2026 growth forecast.

The IMF says public debt is at its highest level since World War Two and is projected to exceed 100% of GDP before 2030. Georgieva said policymakers cannot rely on growth alone to solve fiscal problems and urged high-debt advanced economies to adopt credible medium-term fiscal consolidation plans. She said central banks in many countries may need a “prudently hawkish bias” and described rate hikes by the Federal Reserve, European Central Bank and Bank of Japan as “highly appropriate.”

Georgieva said AI investment as a share of GDP is likely to exceed investment in railroads, electricity grids or telecommunications infrastructure. She warned that market disappointment over productivity and earnings gains could become “a far-reaching shock,” while IMF research suggests AI could add half a percentage point to annual global growth if done right. She also cited risks including labor-market fallout, cyber and stability threats, and frontier models escaping human control.