Business · Singapore Bureau
AI investment cushions global economy amid mounting risks, IMF warns
The International Monetary Fund expects global economic growth to exceed 3% this year, bolstered by artificial intelligence investments. However, the fund cautioned that escalating geopolitical tensions and rising debt burdens pose significant threats to the outlook.
LSN Singapore ·
The global economy is poised to achieve above 3% real GDP growth in 2024, driven largely by robust investment in artificial intelligence technologies that have offset headwinds from Middle Eastern conflicts, the International Monetary Fund said on Tuesday.
Despite the positive near-term trajectory, the IMF highlighted mounting downside risks threatening economic stability across the region and beyond. Energy price shocks stemming from Middle East tensions, combined with persistent inflationary pressures, continue to weigh on outlooks for many countries.
A growing concern for policymakers is the widening gap between developed and developing economies. The fund warned that an increasing number of nations are being left behind by the current growth trajectory, with many facing unsustainable debt loads that limit their fiscal flexibility and development prospects.
The IMF's assessment underscores the uneven nature of the global recovery, with advanced economies benefiting disproportionately from AI-driven productivity gains while emerging and developing markets struggle with debt servicing and external shocks. The fund cautioned that without coordinated policy responses, these disparities could deepen, creating longer-term stability challenges.