International Monetary Fund chief Kristalina Georgieva said on Saturday that this year’s Annual Meetings in Bangkok were marked by “optimism and worry” as the event wound down. Speaking at a press briefing alongside Saudi Finance Minister Mohammed al-Jadaan, she said the IMF had a “responsibility” to help low-income countries struggling with price shocks stemming from the Iran war.
The meetings in the Thai capital this week brought together finance ministers, central bank chiefs and other senior officials from around the world. Georgieva said the gathering reflected both hope and concern about the global outlook.
Optimism over AI and Asia tempered by concerns
Georgieva pointed to the resilience of the global economy, the promise of artificial intelligence and the dynamism of Asia as sources of optimism. She said AI was also a source of worry, alongside inflation, high levels of debt, wars and climate risks.
Throughout the week, the IMF had warned that high debt and spiking bond yields were tightening financial conditions just as central banks needed to bring inflation down, likely by raising interest rates.
Energy price shocks feed inflation across income groups
Global energy prices have climbed since late February, when the United States and Israel launched the war on Iran. Tehran’s retaliatory actions have targeted Washington’s Gulf allies and curtailed oil and gas supplies.
The price increases have spread across the globe, fuelling inflation in economies across a range of income groups. The IMF has said the most vulnerable are low-income oil-importing countries that are not exposed to the boom in AI investment supporting growth in many advanced economies.
Georgieva said: “I can tell you that people everywhere, but especially in poorer countries, they don’t like inflation. Inflation is like a tax on the poor.” She said such countries needed spending targets that prioritised growth and protecting the most vulnerable people.
Debt repayments rise as IMF pledges wider support
Higher global interest rates and bond yields were driving up debt repayments for low-income countries, Georgieva said. The share of debt repayments in government revenue had risen from eight to 14 percent in recent years, she added.
She said the Fund had a “relentless pursuit of more resources for low-income countries”. Her organisation, she said, had a responsibility to help countries restructure debt if needed, mobilise domestic resources, bring in international finance and create conditions for private investment.
Closing her remarks, Georgieva said: “When we do our best, it translates into better lives for people.”
