IMF’s Georgieva Warns World Must Brace For Frequent Economic Shocks

International Monetary Fund Managing Director Kristalina Georgieva said the world must build stronger foundations to withstand increasingly frequent shocks.

“I am worried that we are not completely internalising yet that this is how the world is going to be,” Georgieva told Bloomberg’s podcast Leaders with Francine Lacqua. “We are not going to get to a place where shocks are gone.”

Georgieva, leading the Washington-based lender since 2019, has navigated crises including the Covid pandemic, the war in Ukraine, trade tensions, and the West Asia conflict.

The IMF has a lending capacity of just under $1 trillion, and her role is to keep the fund’s 191 members focused on supporting the global economy. “The best ammunition we have is objective analysis,” she said.

A major transformation underway is the spread of artificial intelligence and its implications for labour markets and local economies.

Georgieva said the fund and other organisations previously failed to address inequalities arising from globalization and aim to avoid repeating similar oversights with AI.

“We collectively, including the fund, did not appreciate the backlash against globalisation that came from the fact that, yes, the world economy is doing better as a whole, but many communities were hollowed out because their jobs disappeared and there was not enough attention to them,” she said.

“I’ll tell you what I’m very keen not to see repeated is the same with artificial intelligence.”

The IMF will update its global economic outlook in July, after lowering growth projections in April due to the war in West Asia.

It also conducts annual economic reviews of member countries and other reports under its surveillance mandate.

In 2024, two years after Russia invaded Ukraine, the IMF plans to restart its annual review of Russia’s economy — the Article IV consultation — for the first time since the war began.

Several European Union countries criticised the decision, arguing it could legitimise Kremlin efforts to evade sanctions.

“It was a very tricky moment because bombing was going in both directions. We decided to delay,” Georgieva said.

“We need to collect data on trade, import, export. Russia was very reluctant to provide this data.”

She added that the assessment will resume at some point, without specifying a timeline.

Since the invasion, the IMF has supported Kyiv with financing linked to reforms, providing $15.6 billion in 2023 and $8.1 billion this year.