Countries around the world must move faster to reduce debt and address widening inequality as their economies absorb the combined pressures of an artificial intelligence boom, heavy borrowing, and the economic shocks of wars in the Middle East and Ukraine, IMF Managing Director Kristalina Georgieva said Wednesday.
In a speech delivered in Singapore ahead of the autumn IMF-World Bank meetings in Bangkok, Georgieva framed the moment as a test of political will. «Some very tough political choices stare us in the face,» she said. «My message to the world's economic policymakers next week will be this: we cannot keep delaying necessary policy action — you have the tools, now have the wisdom to use them.»
At the Bangkok meetings, finance ministers and central bank governors from 191 IMF-World Bank member countries will assess the state of the global economy and discuss strategies to support financial stability and sustained growth. Georgieva said the hardest recent blows to global well-being have come from conflicts in the Middle East, Ukraine, and elsewhere.
Excessive debt, she noted, is becoming an increasingly heavy burden for wealthy countries such as the United States, Japan, and Germany, as well as for low-income nations forced to choose between spending on public welfare and repaying costly loans at a time of high interest rates.
Georgieva also pointed to risks tied to the rapid buildout of data center capacity needed to deliver artificial intelligence. That investment has helped push stock prices to record highs in many markets and has supported strong economic growth despite high energy costs linked to the Iran war. AI-related investment is likely to exceed, in relative scale, the spending that once built railroads, electricity grids, and telecommunications networks.
«Love it, hate it or fear it, AI is here, rapidly becoming a key driver of countries' relative fortunes in the world economy,» she said. The AI building boom is underpinning robust corporate earnings as well as higher inflation, but Georgieva warned of a lag between the heavy investments involved and the arrival of AI's benefits. «Should earnings fall short,» she said, «hyperscaler leverage and large and growing global holdings of U.S. equities could turn a disappointment into a far-reaching shock.»
The geographic concentration of the AI economy is also a concern. Seven of the top 10 countries for AI-related trade are in the Asia-Pacific region, where the share of global economic activity has risen to 43% from 25% in 1991, the last time the meetings were held in Bangkok. While China, India, Japan, South Korea, Taiwan, and other countries with strong tech sectors are benefiting from the boom, Georgieva said it is bypassing most others, adding to economic inequality.
AI is also raising energy demand, pushing prices for fuel, fertilizer, food, and other key commodities still higher. Georgieva urged countries to rein in public spending and to raise the cost of borrowing as needed to control inflation, while protecting the most vulnerable members of their societies.
She called for policies to ensure AI is well regulated and to train workers, make labor markets more flexible, facilitate entrepreneurship, and improve energy security. The message, she said, is that governments already possess the tools to act — and that further delay carries mounting costs.