Global growth has proven more resilient than anticipated to the energy supply shock triggered by the war in Iran and the closure of the Strait of Hormuz, International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday.
Speaking ahead of next week’s G20 finance leaders’ meeting in Asheville, North Carolina, Georgieva described a balancing act between negative energy shocks from the Persian Gulf and positive growth impulses from the artificial intelligence investment boom. The latter, initially concentrated in the United States, is now spreading internationally as countries expand data center construction and AI hardware deployment.
Georgieva highlighted mounting fiscal concerns, pointing to rising bond yields and stalled disinflation in several economies. Risks to the global outlook remain skewed to the downside, she said, as central banks are expected to maintain restrictive monetary policies to curb inflation. The IMF chief noted that fiscal deterioration in some countries could further constrain policy space.
The resilience against the energy shock reflects a combination of factors, including reduced oil and gas reserves in many nations, increased energy supply from outside the Gulf region, softer demand, expanded renewable capacity, and a partial return to coal-fired power generation in some areas. Georgieva emphasized that these adjustments have helped cushion the impact of disrupted energy flows through the Strait of Hormuz, a critical chokepoint for global oil shipments.
The IMF’s assessment comes as global growth grapples with persistent headwinds, including high debt levels, lingering inflation, and ongoing trade tensions, all of which continue to test economic stability despite the relative resilience to the energy disruption.
