IMF: War, debt, ageing workforce threatening global economy

…Provides $40bn financial support to Nigeria, 17 others

The International Monetary Fund (IMF) has warned that the global economy is facing fresh pressures from war, rising public debt, disruptions to trade and rapid advances in artificial intelligence (AI), despite showing resilience entering 2026.

The warning is contained in the IMF’s 2026 Annual Report, titled “Navigating a Precarious World,” which examines the major forces shaping the world economy and the Fund’s work during its 2026 financial year.

The Fund’s Managing Director, Kristalina Georgieva, said the global economy remained resilient despite increasingly frequent and overlapping shocks, but warned that uncertainty remained high and the medium-term growth outlook was weak.

She stressed the need for stronger economic growth, price and financial stability, sound fiscal policies and structural reforms, while describing AI as both an opportunity and a potential threat.

The report comes ahead of the 2026 IMF-World Bank Annual Meetings in Bangkok, Thailand, in October, where policymakers are expected to discuss how to strengthen economic resilience and promote sustainable and inclusive growth amid changes in geopolitics, trade and technology.

According to the report, the world economy remained relatively resilient in 2025, supported by private-sector activity, fiscal and monetary policies and rising investment in technology.

However, the IMF said the situation changed significantly after war broke out in the Middle East towards the end of February, triggering disruptions to energy and other commodity supplies and putting pressure on economies far beyond the region.

It said the shock came at a time when global public debt was already close to record levels, making it harder for governments to respond to new economic pressures.

The Fund also identified ageing populations, high debt and other structural problems as challenges that could weigh on global growth over the medium term.

At the same time, the IMF said artificial intelligence could provide a major boost to productivity and investment, although its rapid deployment could also disrupt jobs, labour markets and economic policies. The report also highlighted changes in global trade, saying geopolitical tensions, shifting trade relationships and supply-chain disruptions were reshaping the way countries trade and invest.

It said these developments were affecting economic growth and forcing countries to adjust to a changing global trading system.

Another emerging issue is digital finance. The IMF pointed to the rapid growth of stablecoins, digital payments, central bank digital currencies and tokenisation as developments that could change the financial system while creating new regulatory challenges.

The report said the IMF continued to support its 191 member countries through economic monitoring, financing and technical assistance.

During the 2026 financial year, the Fund conducted 138 Article IV consultations, which involved detailed assessments of member countries’ economic and financial policies.

It also provided $40 billion in financing to 18 countries, including about $2 billion to nine low-income countries, while spending about $400 million on capacity development, including technical assistance and training.

The IMF said its role was increasingly focused on helping countries manage shocks while strengthening their economies for future challenges.

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