Georgieva flags optimism, worry as Bangkok meetings end

The IMF-World Bank Annual Meetings in Bangkok ended on Saturday, October 17, with International Monetary Fund Managing Director Kristalina Georgieva saying the discussions were "marked by both optimism and worry." She pointed to the economy's resilience and the promise of artificial intelligence as reasons for hope, and to inflation, debt, wars and climate risks as reasons for concern.rfi.fr

"Optimism from the resilience of the global economy, the promise of AI, the dynamism of Asia," Georgieva told reporters at a briefing with Saudi Finance Minister Mohammed Al-Jadaan, who chairs the International Monetary and Financial Committee (IMFC). "But AI is also recognised to be a source of worry, and so are inflation, high levels of debt, wars, climate risks".aljazeera.com

Pressure on poorer nations

Georgieva said the IMF has a "responsibility" to help low-income countries hit by price shocks from the US-Israel war on Iran. Energy prices have surged since that war began in late February. "People everywhere, but especially in poorer countries, they don't like inflation. Inflation is like a tax on the poor," she said.rfi.fr

Higher global interest rates have raised debt repayments for low-income countries from 8% to 14% of government revenue in recent years, Georgieva said. She described the Fund's job as helping countries restructure debt where needed, raise more revenue at home, attract international finance and create conditions for private investment. She also said the IMF would back Iraq "very firmly" with a loan programme, and that talks with Lebanon had made "significant progress".aljazeera.com+1

About a dozen countries, many of them in Africa, have discussed new IMF assistance. The Fund estimates extra financing needs tied to the Middle East energy shock at $20 billion to $50 billion.nationthailand.com

Hormuz is not a quick fix

Even with Iran announcing the reopening of the Strait of Hormuz, the energy crisis will not end right away, IMF leaders warned. Georgieva said damaged infrastructure and disrupted supply chains would keep weighing on economies. Al-Jadaan said the real test is whether tankers return to normal operations and insurers come back at viable rates. Georgieva added that the IMF is not changing its economic scenarios just because markets have rallied. Its more favourable scenario puts global growth near 3.1%.nationthailand.com

The IMFC said escalating conflicts and trade tensions "could further disrupt critical trade routes, exacerbate commodity price pressures… and worsen energy and food security".aljazeera.com

On AI, Georgieva said member countries see its value in supporting growth but warned against relying on it too much: "when we are dependent on one particular driver of growth, it is like we stand on one leg".rfi.fr