IMF Chief Warns the World Has Not Adjusted to Repeated Economic Shocks

The head of the International Monetary Fund (IMF), Kristalina Georgieva, warned that the world is not prepared for the shocks that keep accumulating and must build structures strong enough to withstand repeated shocks, RBC reported. Speaking on a podcast, she said global upheavals are not a temporary phase but a new reality, and that "we are not going to get to a place where shocks are gone," according to Bloomberg's account of her remarks.

Georgieva, who has led the fund since 2019, pointed to the series of crises in recent years, the pandemic, the war in Ukraine, the disruption from tariffs, and now the conflict in West Asia. She also singled out the spread of artificial intelligence as a change whose effects on labor markets and local economies could become the next source of instability, and she said institutions had failed to anticipate the inequalities that globalization produced.

From a monetary standpoint, the warning is notable for what it does not say. Years of loose central-bank credit helped conceal the cost of earlier shocks, and the consequences of that policy, in the form of high debt and persistent inflation, are part of why each new disruption now meets a weaker economy.