Ankara:The global economy is currently experiencing two significant pressures, one from a negative energy supply shock and the other from a positive demand shock due to artificial intelligence (AI), according to Kristalina Georgieva, the head of the International Monetary Fund.

According to Anadolu Agency, Georgieva, in a speech delivered in Singapore, addressed the major economic challenges ahead of the annual IMF meetings in Thailand. She emphasized that the global economy must contend with the rapid advancement of AI, persistently high energy prices, and unprecedented levels of public debt.

Georgieva highlighted that global public debt is on track to exceed 100% of the gross domestic product, reaching levels not seen since the end of World War II. Advanced economies are particularly notable for having some of the highest gross debt loads.

She noted that these opposing forces are pulling the global economy in different directions, with oil prices hovering around $100 per barrel primarily due to transport costs and other risks. Additionally, natural gas supplies from the Gulf are severely impaired, as shipping through the Strait of Hormuz faces threats.

On the technology front, Georgieva mentioned that AI hardware and related products now constitute over 10% of global goods trade. She suggested that AI could potentially contribute up to 0.5% of additional global growth annually if managed effectively by countries.

Georgieva urged economic policymakers to cease delaying necessary actions and to implement credible fiscal consolidation plans. She also recommended that central banks maintain a cautiously hawkish stance on monetary policies, owing to the AI boom, energy shocks, and high public debt, which are contributing to inflation.