IMF chief Georgieva says world isn’t ready for rising shocks
International Monetary Fund Managing Director Kristalina Georgieva emphasised that in light of the numerous crises encountered in recent years, it is essential for the world to establish robust foundations capable of enduring increasingly frequent shocks. “I am concerned that we have not fully grasped that this is the reality we will face moving forward,” Georgieva stated. “We are not going to reach a point where shocks are eliminated.” Georgieva, who has led the Washington-based lender since 2019, has navigated through the Covid pandemic, the war in Ukraine, the tariffs turmoil, and now the conflict in West Asia. The IMF possesses a lending capacity of nearly $1 trillion, and her role — as she articulated — involves ensuring that the fund’s 191 members remain united in their efforts for the overall benefit of the global economy. “The best ammunition we have is objective analysis,” she stated.
One significant shift currently occurring is the proliferation of artificial intelligence and its effects on labour markets and regional economies. Georgieva stated that organisations, including hers, did not adequately acknowledge the inequalities stemming from globalisation, and she aims to ensure that similar oversights do not occur with AI. “We collectively, including the fund, did not anticipate the backlash against globalisation that arose from the reality that, while the world economy is improving overall, numerous communities have been left hollowed out due to job losses and insufficient attention to their circumstances,” she stated. “I’m quite eager to avoid a repeat of the situation we faced with artificial intelligence.”
The fund is set to revise its outlook for the global economy in July, following a downgrade of its growth projection for the year in April due to the ongoing conflict in West Asia. The lender conducts annual economic revisions of member countries, along with other reports as part of its surveillance mandate. In 2024, two years following Russia’s invasion of Ukraine, the IMF declared the resumption of its annual review of Russia’s economy — the Article IV — marking the first occurrence since the onset of the conflict. The plan faced significant opposition from various European Union nations that questioned Georgieva regarding the decision.
It has been suggested that engaging Russia on economic matters could potentially validate the Kremlin’s attempts to circumvent sanctions. “It was a very complex situation as bombardments were occurring from both sides. “We decided to delay,” she stated. “It is essential to gather data regarding trade, imports, and exports.” Russia displayed considerable hesitation in supplying this data. She mentioned that “at some point we will have the regular assessment restarted,” but did not elaborate on the timing. The fund has been providing financial support to Kyiv, linked to essential reforms since the onset of Russia’s invasion, with two programs amounting to $15.6 billion in 2023 and $8.1 billion this year.
