International Monetary Fund Managing Director Kristalina Georgieva has warned that a sudden loss of investor confidence in artificial intelligence could create financial stability risks and weaken global economic growth. Speaking in Singapore ahead of the IMF and World Bank annual meetings, Georgieva said artificial intelligence could eventually add as much as half a percentage point to annual global growth. She noted that artificial intelligence hardware and related products already represent more than 10% of global goods trade, making the sector increasingly important to the wider economy. Georgieva also highlighted rising energy costs, with oil prices near $100 per barrel, alongside disruptions affecting natural gas supplies. At the same time, global public debt is expected to exceed 100% of global economic output, increasing pressure on governments. She urged governments to make difficult fiscal decisions, improve the targeting of financial support and avoid excessive borrowing. She also called for cautious monetary policies as artificial intelligence investment, energy costs and debt pressures contribute to inflation risks. The IMF is additionally preparing for possible El Niño-related disruptions, which could worsen food insecurity, crop losses and inflation in vulnerable economies.
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