IMF chief warns global economy faces risks from energy shocks and AI-driven demand

International Monetary Fund Managing Director Kristalina Georgieva has warned that the global economy faces mounting risks from potential energy shocks and surging demand tied to artificial intelligence, according to Anadolu Agency. She said global public debt is on track to exceed 100% of GDP in the near term, a level not seen since World War II.

Georgieva's comments point to a combination of pressures facing policymakers worldwide: volatile energy markets that could disrupt growth, and the rapid expansion of AI-related investment and infrastructure, which is reshaping demand for electricity, computing capacity, and capital. Together, these factors are adding new sources of uncertainty to an already strained global fiscal picture.

The warning about public debt levels reflects years of elevated government borrowing, driven in part by responses to the pandemic, higher defense spending in several regions, and the costs of servicing existing debt as interest rates have risen from historic lows. Georgieva's reference to World War II-era debt levels underscores the scale of the fiscal strain many governments are now managing.

The IMF has previously urged governments to pursue fiscal consolidation where possible, while cautioning that abrupt austerity measures could undermine growth, particularly in economies still recovering from recent shocks. Georgieva's latest remarks suggest the Fund continues to view debt sustainability as a top-tier risk to the global outlook.

On the energy front, the report does not specify which particular shocks Georgieva was referring to, but her comments align with broader concerns among economists about the potential for supply disruptions or price volatility stemming from geopolitical tensions and the energy demands of expanding AI infrastructure.

The IMF chief's remarks add to a growing body of commentary from international financial institutions about the dual pressures of financing long-term technological transitions, such as the buildout of AI infrastructure, while also managing near-term fiscal and energy-related risks to global growth.