Speaking ahead of the IMF and World Bank annual meetings next week, Georgieva described a global economy pulled in two directions: a negative energy supply shock from the war in the Gulf, now in its eighth month, and a positive demand shock from the AI investment boom. The combined effect, she said, is highly uneven across the world.
"Love it, hate it, or fear it, AI is here," Georgieva said.
She said global AI investment as a share of GDP will reach and likely exceed the amounts that went into building the railroads, the electricity grid or the telecommunications network, and that AI hardware and related technology products already account for more than a tenth of world goods trade.
The IMF estimates AI could add up to half a percentage point to annual world growth if managed well. "Going from 3% to 3.5% over a decade, that is like adding an economy the size of ASEAN to the world economy," Georgieva said.
But the benefits are likely to be highly concentrated. The boom largely bypasses economies less involved in the global AI supply chain, increasing the risk of widening economic inequality across the globe.
The boom is also feeding inflation concerns. "The AI building boom is inflationary," Georgieva said, along with energy and food shocks, tariffs and defense spending.
Oil prices have stayed above $100 per barrel, and retail diesel prices have risen to record highs as refining capacity squeezes energy supplies. Bond yields in the United States, Germany and Japan have surged to their highest levels in decades, and ballooning long-term private bond issuance by AI-related borrowers is competing with governments for capital.
Global public debt is near its highest level since World War II and on track to soon exceed 100% of GDP, with advanced economies the main driver, Georgieva said. She urged policymakers to stop delaying painful choices on debt.