BANGKOK, Oct. 16 (Xinhua) -- Global economic leaders gathering in the Thai capital on Friday warned that escalating sovereign debt burdens, geopolitical conflict, and rapid technological disruption risk fragmenting the world economy, even as headline global growth holds steady at 3.1 percent.
Speaking at the plenary session of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, policymakers emphasized that while artificial intelligence (AI) is delivering unprecedented productivity momentum to select advanced economies, the broader global financial architecture faces mounting strain from high borrowing costs and shrinking fiscal buffers.
The summit marks the return of the Bretton Woods institutions to the Queen Sirikit National Convention Center in Bangkok 35 years after the city first hosted the gathering in 1991.
Delivering her annual address to the Board of Governors, IMF Managing Director Kristalina Georgieva described the global economy as navigating between "two big opposing forces": a drag caused by ongoing energy supply shocks and a countervailing surge driven by AI-led investment.
A year ago, in October 2025, the projection for 2026 economic output stood at 3.1 percent. Today, that estimate is holding steady at 3.1 percent, Georgieva told delegates, adding that "trade, meanwhile, has flown around all obstacles."
However, Georgieva cautioned that the headline stability masks sharp underlying divergence. While technology leaders in the United States, China, India, and parts of Asia are capturing substantial growth upgrades, economies battered by conflict and persistent inflation are experiencing severe downgrades.
"Our boat is being lashed by the waves of technology and geopolitics. Our ability to twist and turn and maneuver is impaired by a heavy load of public debt," she said, urging central banks to remain restrictive where inflation persists and calling on finance ministers to pursue decisive fiscal consolidation to rebuild depleted buffers.
World Bank Group President Ajay Banga underscored the growing financing shortfall facing developing economies, warning that public balance sheets alone cannot bridge the gap.
Banga reported that the World Bank more than tripled its private capital mobilization in fiscal year 2026 by deploying reformed guarantee instruments and blended finance structures.
He focused specifically on an impending demographic challenge across the developing world, noting that 1.2 billion young people will reach working age over the coming decade against current projections of only 420 million new jobs.
"A good job is the surest way out of poverty," Banga said. "We are refocusing our investments on foundational skills, infrastructure, digital connectivity, and entrepreneurship to close this jobs gap."
Welcoming delegates, Thai Prime Minister Anutin Charnvirakul contrasted the global integration that characterized the 1991 meetings with today's fractured geopolitical environment.
"Back then, the fax machine represented speed. Today, AI is transforming our activities and our way of life," Anutin said. "The world was moving toward greater economic integration. Today, geopolitical fragmentation is reshaping trade and investment."
Anutin called on member nations to resist insular trade policies and leverage regional groupings such as the Association of Southeast Asian Nations to maintain cross-border economic ties.
Annual Meetings Chairman Carlos Carvallo Spalding, president of the Central Bank of Paraguay, pointed to his country's transition from high inflation and recession in previous decades to recently achieving investment-grade credit status as proof that multilateral reform programs remain effective.
"The challenges we face are impossible to solve alone," Carvallo said, pointing to recent overhauls of the joint Debt Sustainability Framework for Low-Income Countries as essential steps to shield the most fragile economies from external shocks.
The Bangkok meetings continue through Sunday, with discussions focused on harnessing the benefits of AI while managing its economic and social risks, debt governance, and financing a resilient green economy. ■
