IMF warns global economic risks persist

Washington: The International Monetary Fund's policy-setting committee has warned that the global economy faces mounting risks from wars, trade tensions, energy disruptions and rising debt, even as growth has proved more resilient than expected.

In a statement issued on Saturday following its 54th meeting in Bangkok, the International Monetary and Financial Committee (IMFC) said economic stability could not be taken for granted as governments confront overlapping geopolitical and financial challenges.

"The global economy has weathered the latest in a series of shocks better than expected, but continued resilience should not be taken for granted," the committee said.

The statement, issued under the chairmanship of Saudi Finance Minister Mohammed Aljadaan, highlighted the economic consequences of ongoing conflicts, disruptions to international supply chains and mounting pressure on vulnerable countries.

The committee said wars and conflicts were imposing substantial humanitarian and economic costs, with poorer countries suffering disproportionately.

It warned that escalating geopolitical tensions could further disrupt international trade routes, increase commodity prices and worsen energy and food insecurity.

The assessment comes amid continuing uncertainty over global energy supplies, international trade policies and the financial consequences of prolonged conflicts.

The committee said the global economy had maintained broadly stable growth despite successive shocks, but the capacity of governments to absorb further disruptions had weakened.

It identified rising sovereign bond yields, high public debt and refinancing pressures as additional threats to financial stability.

These developments could create particular difficulties for countries facing heavy borrowing requirements or limited access to international capital markets.

The committee also addressed the growing influence of advanced intelligence technologies on the global economy.

It acknowledged that rapid technological progress was encouraging investment and trade and could improve productivity.

However, it warned that uncertainty over the economic and financial effects of these technologies could amplify existing vulnerabilities.

The IMFC called for sound macroeconomic policies, credible fiscal frameworks and continued cooperation among governments and international financial institutions.

It urged countries to address fiscal weaknesses while protecting vulnerable populations and maintaining investments necessary for long-term economic growth.

Central bank independence remained essential for maintaining policy credibility and controlling inflation expectations, the committee said.

The statement also welcomed the Bangkok Blueprint, an initiative intended to strengthen digital finance safeguards, cybersecurity resilience and international efforts against digital fraud.

The committee called for greater cooperation to address excessive global imbalances, trade tensions and distortions affecting international commerce.

It emphasised the need for secure and resilient energy supplies and the importance of freedom of navigation for global economic stability.

The committee also renewed its commitment to improving sovereign debt restructuring, particularly for low-income countries and vulnerable middle-income economies.

It called for greater transparency from borrowers and creditors and more predictable debt restructuring arrangements.

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