IMF chief urges cooperation on AI and war risks as US stresses growth at Bangkok meetings

Centre · 1IMF managing director Kristalina Georgieva appealed on 16 October to global leaders to cooperate in the face of multiple economic risks, including fast advances in AI and a prolonged war in the Middle East, at the IMF and World Bank annual meetings in Bangkok. 1 Centre · 1She told a plenary session that "the need of the hour is for urgent and practical international cooperation", and said she spent sleepless nights worrying about how to regulate AI and keep poorer countries from being left behind. 1 Centre · 1She said bond markets were sensing the risks, with US, German and Japanese 10-year yields at their highest levels in decades. 1

Centre · 1Earlier in the week the IMF slightly raised its 2026 global growth forecast to 3.1 per cent, well below the historical average, while flagging risks from a possible end to the AI investment boom, rising debt and the Middle East conflict. 1 Centre · 1The IMF has said that without the US-Israeli-led war against Iran and Tehran's closure of the Strait of Hormuz, which triggered a large global energy shock, it would have expected AI to have fuelled much stronger growth. 1 Centre · 1US Treasury Under Secretary Erin Browne pushed back in a call with reporters, citing record US stock market highs, strong US output and an improving Japanese economy, and said the IMF "needs to take a more balanced approach" and should weigh opportunities for positive shocks driven by American innovation, energy abundance and productivity reforms. 1

Centre · 1She credited President Donald Trump's policies on tax, trade, energy and deregulation with paving the way for stronger investment and durable growth. 1 Centre · 1Markets were volatile: South Korean shares had their biggest weekly fall in 18 years, Japan's market lost 5.4 per cent over the week, and Indonesian stocks fell 11.6 per cent on Friday, their steepest one-day fall in 28 years, after MSCI said the market no longer merited "emerging market" status. 1 Centre · 1Philippine central bank governor Eli Remolona warned that Asia had not learned the lessons of the 1997 financial crisis. 1

Centre · 1IMF strategy chief Christian Mummsen said low-interest IMF lending to low-income countries had quadrupled since COVID, with about 60 per cent of IMF financing since then going to them, and Barbados joined countries calling for an international panel on inequality. 1 Right · 1On 17 October, as the meetings wound down, Georgieva said they had been "marked by both optimism and worry", speaking at a briefing with Saudi Finance Minister Mohammed al-Jadaan, according to AFP. 2 Right · 1She located the optimism in the resilience of the global economy, the promise of AI and Asia's dynamism, and the worry in AI, inflation, high debt, wars and climate risks. 2

Right · 1She said the IMF had a "responsibility" to help low-income countries hit by price shocks from the Iran war, noting that debt repayments as a share of government revenue in those countries had risen from 8 to 14 per cent, and that inflation is "like a tax on the poor". 2 Right · 1AFP reported that energy prices have spiked since late February, when the US and Israel launched the war on Iran and Tehran's retaliation targeted Washington's Gulf allies and curtailed oil and gas supplies; the IMF has warned that debt and bond yields are tightening conditions just as central banks may need to raise rates. 2