Archive · 26 Aug 2026
IMF Chief Sees Energy Resilience but Warns Fiscal Risks
The head of the IMF said the world economy has handled a recent energy problem better than expected.
The problem was linked to the war involving Iran and the closure of the Strait of Hormuz.
Countries used stored fuel, found supplies from other places and used less energy.
Renewable energy and, in some places, coal power also helped.
Investment in artificial intelligence is giving businesses and economies another boost.
However, prices are still rising too quickly in some places.
Governments also owe a lot of money, and higher interest rates make that debt more expensive.
Georgieva said countries need careful plans for managing their money.
She warned that another jump in oil prices could make the economy’s problems worse.
Kristalina Georgieva said the global economy has weathered the Gulf energy shock better than the IMF feared.
Higher energy prices are being offset partly by artificial-intelligence investment, energy reserves and increased non-Gulf supplies.
Georgieva warned that stubborn inflation, rising bond yields and high public debt could weaken future growth.
She urged governments to create credible plans to reduce debt and deficits while central banks prioritize price stability.
The IMF said the energy shock is not over, with renewed oil disruptions potentially keeping interest rates high.
- Who
- Kristalina Georgieva, managing director of the International Monetary Fund, and global policymakers.
- What
- Georgieva assessed the global economy’s resilience to the Gulf energy shock while warning about inflation, debt, bond yields and fiscal pressures.
- When
- Ahead of next week’s G20 finance leaders’ meeting; the IMF plans to update its growth outlook in October.
- Where
- The energy shock is linked to the Gulf and the closure of the Strait of Hormuz; the IMF’s October meetings will be held in Bangkok.
- Why
- To discuss risks to global growth and urge governments and central banks to manage debt, deficits and inflation.
Economic Resilience
Continuing Risks
Impact of the energy shock
Economic Resilience
The global economy has absorbed the Strait of Hormuz-related energy shock better than the IMF expected, helped by reserves, non-Gulf supplies, weaker demand and renewable capacity.
Continuing Risks
The energy shock is not over, and a renewed oil-price surge could raise inflation and keep central banks’ policies restrictive.
Artificial-intelligence investment
Economic Resilience
Strong AI investment is supporting U.S. corporate earnings and consumer spending, while other economies are expanding data-centre and AI-hardware spending.
Continuing Risks
The IMF has cited uncertainty surrounding the AI investment boom as a risk to its global growth outlook.
Fiscal and monetary policy
Economic Resilience
Central banks can help preserve price stability by remaining focused on inflation, while governments can address debt and deficit problems through credible plans.
Continuing Risks
Higher interest rates for longer would increase debt-servicing costs, weaken economic activity and intensify pressure on countries with stretched public finances.
- IMF managing director
- Kristalina Georgieva
- Main economic tension
- Higher Gulf energy prices are weighing on growth, while artificial-intelligence investment is providing support.
- Oil prices
- Brent crude has remained around $80-$90 a barrel since mid-June, below a spring peak of more than $118.
- Key risks
- Stubborn inflation, rising bond yields, high debt, trade tensions and tighter monetary policy.
- U.S. Treasury yields
- Long-term Treasury yields recently reached their highest level in 19 years.
- Previous IMF forecast
- The IMF cut its 2026 global growth projection to 3% in July.
- Next IMF outlook
- The IMF is due to update its global growth outlook in October during annual meetings in Bangkok.