International Monetary Fund (IMF) Managing Director Kristalina Georgieva has warned that persistent energy shocks, rising public debt, and stalled disinflation pose significant risks to global economic growth.
Georgieva issued the warning at the conclusion of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina.
She said the global growth outlook for 2026 has stabilized at around three percent since April, noting that the global economy has absorbed the energy supply shock better than expected.
According to her, this resilience has been supported by tapping into oil and gas reserves, developing new energy sources, and implementing demand-management measures.
She added that surging investment in artificial intelligence (AI), including power projects designed to meet rising electricity demand, is also driving growth, particularly in the United States.
However, Georgieva warned that significant divergences in economic fortunes persist, while risks to the global outlook remain elevated.
“First, the energy shock is not over. The Strait of Hormuz remains largely closed, strategic oil and gas reserves will need restocking, AI drives up energy demand, and in the northern hemisphere, winter is coming,” she said.
She noted that global public debt has approached 100 percent of Gross Domestic Product (GDP), surpassing post-World War II highs and projected to climb even higher.
“Looking back, the debt trajectory resembles a staircase: big vertical steps when shocks occur, little or no reduction afterward,” she said.
The IMF chief also pointed out that the disinflation process has stalled in many countries, while fiscal pressures are pushing core bond yields upward.
She added that the friction between fiscal and monetary policy is stoking anxiety in financial markets.
Turning to AI, Georgieva noted that its long-term impact on productivity and financial stability remains uncertain.
She urged central banks to maintain their focus on price stability mandates, while calling on fiscal authorities to implement credible medium-term consolidation plans.
She also advocated for structural policies aimed at cutting red tape and removing impediments to growth.
“Stronger potential growth would help address the fiscal problem, and addressing the fiscal problem would help lift growth prospects,” she said.