At the IMF annual meeting in Bangkok, attended by policymakers from more than 100 countries, the mood was calm as the global economy has so far withstood six months of high oil prices and geopolitical shocks, including the war in Iran, with growth buoyed by AI investment. The IMF's World Economic Outlook warns this resilience has come at a cost: energy support measures have cost 0.5% of global GDP, and many governments will struggle to sustain them, so the IMF urges targeted, temporary support rather than across-the-board subsidies. Its main concern is unsustainable public finances in rich countries, where budget deficits this year are the highest since the depths of the Covid pandemic and debt is projected to rise from 108% of GDP last year to 115% in five years. Managing director Kristalina Georgieva urged governments to rebuild fiscal buffers before the next shock, as bond yields have risen to their highest levels in decades. The article also notes the UK's plan to balance its books was praised, though UK bond yields have not fallen accordingly.
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Original headline: Countries are defying gravity at all income level : how long can global economy resist chaos ?
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