In Good Company• Dec 17, 2025• 40:34Interview

Why Cooperation Is Essential in Crisis | IMF Managing Director Kristalina Georgieva

From In Good Company

Kristalina Georgieva•Managing Director, IMF

Executive Summary

The IMF projects global economic growth to be resilient but slow, hovering around 3%, which is insufficient to meet global aspirations for better living standards.
Artificial Intelligence presents a dual challenge: it could add up to 0.8% to annual global GDP growth but is also expected to impact 60% of jobs in advanced economies, risking a tsunami of labor market disruption and increased inequality.
High levels of public debt are a major concern, as they limit the fiscal space for countries to respond to future shocks, a stark contrast to the capacity available during the COVID-19 pandemic.
Despite rising geopolitical tensions, the IMF is experiencing a surprising increase in the appetite for international cooperation among its 191 member countries, positioning it as a key forum for global economic dialogue.

10 quotes

Concerns Raised

Slow global growth (~3%) is insufficient to meet the aspirations of people worldwide.
High public debt levels have eroded fiscal space, leaving countries vulnerable to future shocks.
AI is poised to cause a 'tsunami' of labor market disruption, potentially impacting 60% of jobs in advanced economies and increasing inequality.
The high energy consumption of AI poses a primary risk of derailing global decarbonization efforts.

Opportunities Identified

AI could significantly boost global productivity, adding between 0.1% and 0.8% to annual GDP growth.
The global economy has proven more resilient than expected due to stronger institutions and private sector agility.
There is a growing appetite for international cooperation within multilateral forums like the IMF, despite geopolitical tensions.
Inflation is trending down, with Europe in particular having successfully brought it back to its target level.

Key Themes

The IMF's Role as a Global Financial Stabilizer

The IMF acts as the world's financial firefighter, with a $1 trillion lending capacity to support countries facing economic crises. It provides emergency financing, policy advice, and technical assistance to ensure macroeconomic and financial stability, as exemplified by its interventions in countries like Bulgaria and Argentina.

In an era of frequent and overlapping shocks, the IMF's role as a global safety net is critical for preventing localized crises from spiraling into systemic global downturns and for promoting sustainable growth.

The State of the Global Economy: Resilient but Fragile

The global economy has shown remarkable resilience, avoiding the worst-case scenarios post-pandemic. However, growth is sluggish at around 3%, and high public debt levels have eroded the fiscal buffers necessary to combat future crises, creating a fragile equilibrium.

This fragility means that policymakers and investors cannot be complacent. The lack of fiscal space and slow growth pose significant headwinds and increase vulnerability to the next inevitable economic shock.

Artificial Intelligence as a Double-Edged Sword

AI is identified as a major transformative force with immense potential to boost productivity and add up to 0.8% to annual GDP growth. Conversely, the IMF warns it could disrupt 60% of jobs in advanced economies and 40% globally, exacerbating inequality both within and between countries not prepared for the transition.

This highlights the urgent need for proactive policy responses—including education reform, labor market flexibility, and social safety nets—to harness AI's benefits while mitigating its profound societal and economic risks.

Geopolitical Dynamics and International Cooperation

The discussion highlights the significant influence of the United States, which holds the sole veto power within the IMF. Despite a fragmented global landscape, the speaker observes a renewed and stronger appetite for cooperation among member nations within the IMF, as they recognize the value of a shared forum for economic stability.

This suggests that multilateral institutions remain vital platforms for dialogue and collective action on global challenges like climate change, AI regulation, and financial crises, even in a world of increasing geopolitical competition.

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Topics

IMF Global Economy Economic Growth Artificial Intelligence (AI)Labor Markets Productivity Geopolitics International Cooperation Fiscal Policy Public Debt Inflation Financial Stability Emerging Markets Climate Risk Monetary Policy

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