IMF Warns: Global Economy Holding On, But Not Keeping Up

INTERNATIONAL Monetary Fund (IMF) Managing Director Kristalina Georgieva says the global economy is proving more resilient than expected, but still far too weak to meet the needs of many nations—especially poorer ones.

Speaking at the G20 Leaders’ Summit in Johannesburg, she said the world had avoided some of the dire outcomes predicted in the aftermath of the pandemic and recent geopolitical tensions. But overall growth remains sluggish and well below pre-pandemic levels.

“The global economy is doing better than we feared, but worse than we need,” Georgieva told world leaders, noting that while a vibrant private sector and years of strengthened institutions have helped maintain stability, serious challenges persist.

She highlighted exceptionally high public debt and stubbornly low growth as major constraints, particularly for low-income and emerging economies now struggling with costly debt servicing due to higher global interest rates.

Georgieva urged governments to rebuild confidence through credible and predictable policies, restore fiscal buffers, and address domestic vulnerabilities. She warned that trade tensions, demographic shifts, and rising climate-related disasters were intensifying global uncertainty.

The IMF chief also called for renewed commitment to global coordination—modernising trade rules, expanding development financing, and accelerating debt restructuring processes. Several African and Asian countries continue to wait for relief under the G20 Common Framework, which critics say has moved too slowly.

She highlighted the IMF’s recent decision to increase its permanent quota resources by 50 per cent, a move designed to reduce reliance on borrowed funds and strengthen the organisation’s crisis-response capacity. The IMF currently operates 50 financial programmes, including 21 in sub-Saharan Africa.

Turning to technology, Georgieva described artificial intelligence as both a transformative opportunity and a major risk. She said AI could boost global growth by nearly 1 per cent but warned that labour market disruptions—especially in advanced economies—could be significant. She urged countries to invest in digital infrastructure, workforce training, and fair regulatory frameworks to ensure developing nations are not left behind.

With global growth slowing and many economies burdened by high debt and rising vulnerabilities, Georgieva said coordinated action and stronger policy frameworks would be essential to support stability in the years ahead.