IMF and World Bank Meetings Focus on Energy Shock, Debt and AI

BANGKOK, Thailand — Finance ministers and central bankers are meeting in Bangkok for the annual International Monetary Fund and World Bank gatherings, with discussions focused on the global economic effects of an energy shock, rising debt pressures, inflation, climate risks and artificial intelligence.

The programme runs from Monday through Saturday and combines closed-door meetings, public events and policy announcements. The IMF is scheduled to publish its global economic forecast on Tuesday, followed by detailed regional outlooks during the week.

Uneven impact of economic shocks

IMF chief Kristalina Georgieva has described the current environment as a clash between two opposing forces: an energy supply shock and stronger demand connected to artificial intelligence.

“To put it simply, the global economy is being pulled in two opposite directions: a negative energy supply shock and a positive demand shock from AI,” Georgieva said at an event in Singapore the previous week. She added that the effects were “highly uneven across the world.”

The energy shock is linked in the source report to the US-Iran war, which has been associated with sharply higher energy prices and reduced global oil and gas supplies. The IMF has warned that developing countries dependent on imported energy have faced the greatest pressure.

The Fund has called on governments to reduce spending on subsidies and strengthen fiscal buffers after years of shocks since the pandemic. In Europe and the United States, higher energy costs have also contributed to inflation in other goods, while interest-rate increases aimed at containing price pressures have slowed economic activity.

Calls for stronger support for vulnerable countries

Kevin P. Gallagher, director of Boston University’s Global Development Policy Center, said poorer IMF and World Bank members were facing several pressures at once, including spillovers from the Iran war, higher interest rates in Western economies and climate risks worsened by El Nino.

“The IMF and World Bank are not meeting this moment,” Gallagher said, calling for short-term emergency liquidity alongside longer-term financing to make vulnerable countries’ growth paths less exposed to shocks.

The United Nations Development Programme has warned that the combined pressures could push millions more people into poverty as developing countries struggle to maintain support for households.

Alexander De Croo, the UNDP Administrator, said, “Surging oil and food prices leave millions of families with no safety margin.” He described the situation as “a perfect storm that could throw tens if not hundreds of millions of people back into poverty.”

AI brings opportunity and uncertainty

Artificial intelligence is another major issue on the meetings’ agenda. The IMF has said investment in AI could exceed the capital previously invested in building railroads, electricity grids and global telecommunications networks.

Georgieva said AI was rapidly becoming a major factor in countries’ relative economic fortunes. Several events during the meetings are expected to consider the effects on developing economies that may remain outside AI supply chains.

“Love it, hate it, or fear it, AI is here, rapidly becoming a key driver of countries’ relative fortunes in the world economy,” she said.

G20 discussions on borrowing costs

G20 finance ministers are also scheduled to meet on the sidelines of the Bangkok gatherings. Rising bond yields are expected to be high on their agenda.

US Treasury Secretary Scott Bessent will not attend that meeting. A US Treasury Department official attributed his absence to “domestic engagements.”