IMF Calls for Urgent Action Against Debt and Inflation
International Monetary Fund Managing Director Kristalina Georgieva urged member countries to act swiftly upon detecting any rise in inflation rates, emphasizing the importance of reducing large public budget deficits.
Speaking during a panel discussion at the IMF and World Bank Annual Meetings in Bangkok, Georgieva said that significant increases in defense spending also contribute to inflationary pressures, following the energy shock triggered by the war in the Middle East. This situation places central banks under pressure to continue raising interest rates.
She noted that these developments particularly affect developing countries and emerging markets, adding that they have become “victims of rising yields in advanced economies,” referring to the challenges they face amid tightening global financial conditions and higher financing costs.
The IMF Managing Director stated that strong investments in artificial intelligence infrastructure help keep global economic growth at around 3%, pointing out that this financial and technological momentum delivers key benefits to several Asian equipment and device-exporting economies, such as Thailand.
Explaining at the opening of the IMF and World Bank Annual Meetings in the Thai capital, she said that the AI investment boom has created a positive “demand and investment shock” that could raise growth rates in advanced Asian economies by 0.5 to 1 percentage point, while boosting growth in emerging Asian economies by 0.2 to 0.8 percentage points.
Adding on the first day of a week-long series of meetings in the Thai capital, she said that the shift toward AI is driving the global economy to operate more efficiently despite energy supply shock pressures, according to Reuters.
However, she simultaneously warned that AI resembles a “slow-moving tsunami,” whose repercussions could affect about 40% of jobs worldwide, either through development, reduction, or complete elimination. She noted that initial studies show that 10% of jobs in the United States already require AI skills.
