IMF chief warns energy shock, record debt and AI boom threaten global growth

The global economy is under threat from persistently high energy prices, record public debt and risks from the artificial intelligence investment boom, International Monetary Fund Managing Director Kristalina Georgieva warned on Wednesday, urging governments to take protective fiscal and monetary measures.

In a curtain-raiser speech in Singapore ahead of next week’s IMF and World Bank annual meetings in Bangkok, Georgieva said the world was being pulled in two directions — a negative energy supply shock from the Middle East conflicts and a positive demand shock from artificial intelligence that is also fuelling inflation.

“Whether the world’s underwhelming growth rates this decade can be bettered will depend on our success in navigating three major crosscurrents: the rapid arrival of AI, persistently high energy prices, and record levels of public debt,” she said.

Oil prices remain at $100 a barrel, she said, with impaired refining capacity adding another $100 in “crack-spread” margins per barrel for key products including diesel. The winter heating season will boost demand as natural gas supplies remain restricted by threats to LNG shipping through the Strait of Hormuz.

Global public debt is on track to exceed 100% of gross domestic product, and elevated bond yields are “inflating the interest bill at a time of tight budget constraints and competing spending priorities, including defense,” Georgieva said.

New IMF growth forecasts released during the Bangkok meetings will show the biggest downgrades in economies ravaged by war, she said — including Ukraine, suffering significant damage to civilian and economic infrastructure, and Gulf countries hit by Iranian strikes and sharply reduced energy exports.

Georgieva did not indicate whether the IMF’s overall 2026 global growth forecast would change from the sluggish 3.0% rate projected in July, which had assumed the Strait of Hormuz would start to reopen in mid-July.