IMF's Kristalina Georgieva flags economy split by energy and AI
IMF chief Kristalina Georgieva just flagged that the global economy is being pulled in two directions: energy supply problems (like oil price spikes) on one side, and a wave of investment in artificial intelligence on the other.
She told journalists on Tuesday ahead of the G-20 finance ministerial meeting in Asheville, North Carolina, next week that how countries handle these changes depends on their exposure to energy disruptions, macroeconomic vulnerabilities, and their position in the AI chain.
Oil disruptions cushioned, AI fuels growth
Georgieva explained that while recent oil supply disruptions caused by the closure of the Strait of Hormuz were cushioned by extra oil from outside the Gulf, rising oil prices could still mess with inflation control, forcing central banks to keep things tight.
On the flip side, a U.S.-led AI investment surge is boosting growth thanks to new data centers and strong company profits.
But not every country benefits equally, especially those that rely heavily on fuel imports or aren't big players in AI.
The IMF plans to update its global growth forecast in mid-October.