IMF issues price stability warning to central banks and assesses global economy
International Monetary Fund Spokesperson Julie Kozack stated that the global economy remains on a 3 percent growth path while calling on central banks to focus on their price stability targets.
International Monetary Fund (IMF) Spokesperson Julie Kozack stated at a press conference that the global economy remains on a 3 percent growth path, but uncertainties are high, and called on central banks to focus on their price stability targets.
Resilience of the Global Economy
Stating that the global economy has remained resilient despite the six-month war in the Middle East, Julie Kozack noted that the economy weathered shocks, particularly the energy shock, better than feared.
Kozack stated that the world economy continues to stay on a 3 percent growth path, while global uncertainty remains high.
Diverging Shocks and Inflation
Mentioning that the global economy is being pulled in opposite directions by an energy-driven supply shock and an artificial intelligence-led demand shock, Spokesperson Kozack expressed that these forces are driving economies in different directions.
Stating that the disinflation process that began after the 2022 cost-of-living crisis has stalled somewhat, Kozack reminded that the global inflation forecast for 2026 has been revised to 4.7 percent.
Rising Public Debt
Drawing attention to mounting pressures regarding public debt, Kozack stated that the ratio of global public debt to GDP has reached nearly 100 percent.
Noting that this is the highest level seen since World War II, Kozack expressed that they anticipate public debt to increase further on a global scale.
Call to Central Banks
Pointing out that benchmark borrowing costs have risen in advanced economies such as the US, France, and Japan, Kozack emphasized that this situation impacts all countries.
Stating that their advice to central banks on the inflation front is to continue focusing on price stability targets, Kozack also called on fiscal authorities to prepare medium-term consolidation plans.
Artificial Intelligence and Geopolitical Developments
Expressing that artificial intelligence will contribute to growth through a positive demand shock in the short term, Kozack stated that they will focus on productivity gains and lasting growth momentum in the medium term.
Noting that they are closely monitoring US sanctions against Iran, Kozack added that they welcome the dialogue established by the leaders of the US and China on behalf of the global economy.