The International Monetary Fund (IMF), the global macroeconomic surveillance institution, and the World Bank Group (WBG), the main multilateral development lender, opened their annual meetings in Bangkok on Monday, October 12. Before the meetings, IMF Managing Director Kristalina Georgieva identified three threats to the global economy, according to Reuters, cited by BURSA. The first is a negative energy supply shock caused by conflicts in the Middle East: high oil prices may persist even if the Gulf war ends soon. The second is a positive demand shock generated by investment in artificial intelligence, which fuels inflation and is distributed unevenly across countries; a market disappointment over the results of artificial intelligence could become a „major shock”, Georgieva said. The third is public debt, which is at its highest level since World War II.
• Public debt is approaching 100% of GDP
Global public debt rose to just under 94% of GDP in 2025 and will reach 100% of GDP in 2029, one year earlier than the IMF estimated in April 2025, according to the IMF’s April 2026 Fiscal Monitor. The increase in debt is mainly driven by the world’s largest economies. Budgets are under pressure from increasingly high interest payments, social spending, defence spending and the effects of the conflict in the Middle East. The IMF is calling for credible fiscal adjustment, which it considers urgent across all groups of countries.
Governments „can no longer rely only on higher growth rates to solve fiscal problems”, Georgieva said in Singapore on October 7, according to Euronews. She added that „we are not seeing decisive action in highly indebted advanced economies”, where credible medium-term fiscal consolidation plans are the priority at the moment, according to BURSA.
The cost of debt is rising. Georgieva described the recent interest rate increases by the US Federal Reserve, the European Central Bank and the Bank of Japan as „extremely appropriate”, according…
