The International Monetary Fund (IMF) has warned that the global economy is entering a period of heightened uncertainty, as rapid investment in artificial intelligence (AI), persistent energy costs and record of public debt, create new pressures for governments and households.
IMF Managing Director Kristalina Georgieva said the global economy was being pulled in different directions by the positive demand, generated by AI and the negative effects of energy supply disruptions. She made the remarks ahead of the IMF-World Bank Annual Meetings in Thailand, where policymakers are expected to examine the growing risks to economic stability.
According to the IMF, AI is becoming a progressively important driver of investment and international trade. The United States, China and India are emerging as major players in AI infrastructure and adoption, even though several Asian economies occupy important positions in the semiconductor, robotics and technology supply chains.
However, the IMF cautioned that the benefits of the AI transition could remain uneven. Countries without adequate digital infrastructure, skilled workers and effective regulatory systems risk being left behind, potentially widening existing economic inequalities.
Energy costs present another major challenge. Higher oil and gas prices are increasing production, transport and food costs, placing additional pressure on inflation and household incomes. Energy-importing economies, particularly in parts of Asia and Europe, face greater exposure to supply disruptions and rising import bills.
The third major concern is public debt. Global government debt is approaching levels that has not been seen since the aftermath of the Second World War, and higher interest rates are increasing debt-servicing costs and reducing the fiscal space available to governments.
In respect to emerging markets such as Nigeria and some other Africa countries, the pressures highlight the importance of stronger fiscal management, sustainable borrowing and investment in sectors capable of generating jobs and long-term growth. The AI transition also highlights the need for reliable digital infrastructure, workforce development and regulatory frameworks that can encourage innovation, also protect workers and consumers.
Continue reading with Eandel
Subscribe to unlock the complete story and receive your subscriber benefits.
