IMF's Georgieva says AI boom is both growth engine and inequality risk as debt and energy costs bite
IMF managing director Kristalina Georgieva, speaking in Singapore ahead of the annual meetings in Bangkok, said AI investment is becoming a key driver of countries' fortunes but is largely bypassing many economies. She described a negative energy supply shock from the Gulf war alongside a positive AI demand shock, and called for overdue fiscal consolidation in highly indebted advanced economies. Oil remains above $100 a barrel (roughly 92 euros), according to the IMF.
Bottom line — IMF director Georgieva cautions against delaying tough debt decisions, and that AI earnings must justify lofty valuations or risk leaving the world exposed to a far-reaching shock.
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The IMF estimates AI could add up to half a percentage point to annual world growth if managed well, per Georgieva's speech as reported by CNBC and Thenationth.
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Georgieva said AI investment as a share of GDP will match and probably exceed past infrastructure booms in railways, power grids and telecoms, according to NDTV Profit.
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AI hardware and related products already account for more than a tenth of world goods trade, the IMF chief said, per CNBC.
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The Jakarta Post reported that AI-related trade growth is concentrated in the United States, China and India, where companies are spending heavily on data centres.
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Georgieva said 10-year sovereign bond yields in the US, Germany and Japan have reached their highest levels since 2007, 2009 and 1996 respectively, according to Daily Sabah and Thenationth.
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Daily Sabah reported that the IMF's July forecast of 3.0% global growth for 2026 assumed oil at $89 a barrel (about 82 euros), a basis Georgieva did not confirm would change.
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Georgieva described rate rises by the US Federal Reserve, the European Central Bank and the Bank of Japan as 'highly appropriate', per Daily Sabah.
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Georgieva warned that central banks must resist pressure from fiscal authorities to buy debt, calling such a role 'monetary cowboys', according to Daily Sabah.
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Thenationth reported that the IMF expects the region's share of global GDP to have risen from about 25% to 43% since Thailand last hosted the meetings in 1991.