International Monetary Fund (IMF) Managing Director Kristalina Georgieva said the global economy has weathered the energy shock triggered by the Iran war better than initially feared, but warned that rising bond yields and stalled disinflation are putting increasing pressure on public finances.

Energy Shock Proves Less Severe Than Expected

Speaking to reporters in Washington, Georgieva said the global economy has demonstrated considerable resilience despite disruptions to energy supplies linked to the conflict.

Countries have been able to cushion the impact by drawing on oil and gas reserves, diversifying energy supplies, reducing energy consumption and expanding renewable energy capacity. A temporary increase in coal use has also helped offset some of the disruption.

However, Georgieva cautioned that the energy shock is not yet over. A renewed surge in oil prices could put upward pressure on inflation and force central banks to maintain restrictive monetary policies for longer.

Fiscal Risks Are Increasing

Georgieva highlighted growing concerns over government finances, pointing to rising bond yields, high debt levels and a slowdown in the disinflation process.

She said countries need to address their fiscal challenges and establish credible plans to put government debt and budget deficits on a sustainable path.

The IMF chief also warned that central banks may need to keep interest rates elevated if inflationary pressures persist, potentially increasing governments’ borrowing costs.

AI Investment Supports Global Growth

At the same time, Georgieva pointed to artificial intelligence investment, particularly in the United States, as an important source of economic support.

Investment in data centers and AI infrastructure has helped boost corporate earnings and consumer spending. She said the benefits of the AI boom are increasingly spreading beyond the United States as other economies participate in global AI supply chains.

Global Outlook Remains Vulnerable

Georgieva said risks to the global economic outlook are now more balanced than they were in April, although they remain tilted to the downside.

Persistent geopolitical tensions, high public debt, trade disputes and the possibility of renewed energy-price increases continue to pose risks to global growth. The IMF is scheduled to update its global economic forecasts in October.

Source: Patronlar Dünyası/ Prepared by: İlayda Gök