During a policy symposium in Tokyo, organized by Japan's Ministry of Finance, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva noted the rising uncertainty shaping the global economy and urged policymakers to be prepared to operate in a progressively volatile world.
When she delivered the keynote speech, she mentioned the significance of institutions, financial buffers, and agility in policy development and that countries seeking to rise above the disruptions to their economies must keep growing.The IMF is now optimistic that the global economy will remain relatively stable, projecting growth of 3.3 percent in 2026 and 3.2 percent in 2027. However, emerging threats are geopolitical tensions and energy market disruptions.
The current Middle Eastern crisis has already affected energy infrastructure and shipping routes, including the strategically vital Strait of Hormuz, through which about one-fifth of the global oil trade and liquid natural gas transit. Inconveniences have played a major role in reducing global shipping traffic and have contributed to rising oil prices, which have increased by almost 50 percent since the end of 2025. IMF estimates suggest that a long-term 10 percent increase in oil prices would raise global inflation by approximately 0.4 percentage points and reduce global output by at most 0.2 percentage points. Georgieva highlighted long-term structural shifts in the world economy, particularly technological transformation and demographic change.
AI is likely to have a significant contribution towards increasing productivity. The IMF estimates that in Asia, the expansion of AI would raise annual economic growth by up to 0.8 percentage points in the medium term. Automation, combined with labor flexibility, can help Japan and other nations with aging workforces remain productive. At the same time, there are local deviations in demographic characteristics. As Africa's population is set to increase considerably over the next several decades, economies such as Japan and China will experience population declines, resulting in a multi-speed demographic landscape with diverse labor market requirements. Georgieva also noted that fiscal and financial buffers are critical, as they enable governments and firms to absorb shocks and remain stable during economic crises. In light of the increasing uncertainty in the world, she suggested that policymakers must become agile and venturesome; they must look backward at threats but also look ahead to opportunities, such as further integration of regional economies in Asia.
