IMF Managing Director Kristalina Georgieva warned of a challenging future for the global economy on Thursday, highlighting slow medium-term growth, rising trade tensions, and significant debt levels. Her remarks came ahead of the upcoming IMF and World Bank annual meetings.
Georgieva stressed the adverse effects of persistent inflation, particularly on poorer populations, and the risks posed by escalating conflicts in the Middle East, which could disrupt regional economies and global commodity markets.
She noted that increased military spending was straining budgets, reducing the funds available for aid to developing countries. Rising protectionism and trade barriers were further dividing the global economy, limiting trade growth, and adding pressure to an already struggling economic landscape.
Despite the concerns, Georgieva expressed cautious optimism, stating that while the global economy faces significant challenges, there remains potential for improvement. She pointed to positive signs like decreasing global inflation and efforts toward price stability in the United States and Europe.
The IMF’s latest forecasts predict a tough mix of low growth and high debt, warning that the global economy may struggle to eliminate poverty, generate sufficient job opportunities, and produce the necessary tax revenues to manage debt.
Georgieva emphasized that China’s economic growth is slowing, while India’s is accelerating, and although the United States remains stable, Europe lags behind. High levels of public debt make the outlook even more uncertain, as an adverse scenario could push debt-to-GDP ratios up by 20 percentage points.
She advised countries to focus on reducing debt, rebuilding economic reserves, cutting unnecessary spending, and boosting productivity. Georgieva also underscored the need for global cooperation to address shared challenges, such as climate change and the rapid growth of AI technology, requiring international regulatory standards.
“I hope people will leave here somewhat more uplifted, but also a bit scared—enough to take meaningful action,” Georgieva concluded.
