IMF Warns of Global Economic Pressures

Finance ministers and central bankers are meeting in Bangkok for the annual IMF and World Bank gatherings, as the US-Iran war, rising debt and the artificial intelligence boom reshape the global economic outlook.

Economic Forecast in Focus

The meetings run from Monday to Saturday, bringing together senior officials for policy discussions, public events and economic announcements. The International Monetary Fund is scheduled to release its latest global economic forecast on Tuesday, alongside regional outlooks throughout the week. IMF Managing Director Kristalina Georgieva said the world economy was being pulled in opposing directions by an energy supply shock and increased demand driven by artificial intelligence. She warned that the combined effects were uneven across countries.

Iran War Deepens Financial Pressures

The economic fallout from the US war on Iran is expected to dominate discussions, with energy prices rising as Tehran’s retaliatory actions target Washington’s Gulf allies and disrupt global oil and gas supplies. The IMF has warned that developing countries dependent on imported energy face particularly severe consequences. It has urged governments to limit spending on subsidies and rebuild financial reserves after years of economic shocks. However, critics argue that low-income countries need greater support from international lenders rather than pressure to reduce spending.

Developing Countries Face Poverty Risks

Kevin P. Gallagher, director of Boston University’s Global Development Policy Center, said poorer countries were facing mounting pressure from the Iran war, higher Western interest rates and climate-related challenges worsened by El Niño. He called on the IMF and World Bank to provide emergency funding alongside longer-term financing to help countries withstand future economic shocks. The United Nations Development Programme has also warned that rising oil and food prices could push millions more people into poverty. UNDP Administrator Alexander De Croo said governments in developing countries were facing difficult choices between protecting vulnerable households and maintaining their development plans.

AI Investment Boosts Growth

While higher energy costs have fuelled inflation across advanced economies, investment in artificial intelligence has helped drive stock markets to new highs and supported economic growth. Georgieva said AI was rapidly becoming a major factor shaping countries’ economic prospects. The IMF has suggested that investment in the technology could surpass historic spending on railways, electricity networks and global telecommunications. Several events during the meetings will examine AI’s effects, particularly on developing countries that may struggle to benefit because they are not integrated into its supply chains.

G20 Talks to Address Debt Concerns

Finance ministers from the Group of 20 major economies are also expected to discuss rising bond yields and broader financial pressures on the sidelines of the gatherings. US Treasury Secretary Scott Bessent will not attend because of domestic commitments, according to a Treasury Department official.