Kristalina Georgieva: speeches

1. A shared boat in rough water

Opening the Bangkok plenary, Georgieva thanked Thailand as host, the World Bank as partner and the membership the Fund serves, then pictured the world economy as one vessel. Waves of new technology and geopolitical mistrust are lashing it, and a heavy burden of public debt limits how well it can steer. She believes the long-run direction is still improving, but insists good outcomes are never automatic. So far the vessel has proved resilient; keeping it so will take sustained effort.

2. Steady growth, uneven fortunes

Global growth is projected at 3.1% this year, unchanged from a year ago, because an energy shock that drags output down is cancelled out by an AI boom that lifts it. Beneath the average, economies hit by war were marked down, while those in the AI value chain, chiefly the US, China, India and other Asian economies, were marked up. Public debt is too high nearly everywhere, worst among rich countries, rising in emerging markets, and costly in interest for low-income ones as aid shrinks. Energy disruption raises prices and slows output, while AI adds short-term inflation through debt-financed infrastructure. Bond markets are reacting: US, German and Japanese ten-year yields reached multi-decade highs, though trading stays orderly.

3. Advice to governments and central banks

Central banks should stay laser-focused on price stability; the IMF backs the recent tightening by the Fed, the ECB and the Bank of Japan, since acting early beats catching up later, even though higher rates raise public borrowing costs. Most high-debt countries need fiscal consolidation built on credible medium-term plans, sometimes with immediate measures, explained honestly to citizens, shielding the vulnerable and paired with reforms that raise potential growth. This matters most for large advanced economies, whose choices spill over to everyone. Every country should prepare for AI whatever its role, spread access to it, and guard against joblessness, an eroding tax base and above all cyber attacks.

4. What the Fund itself is doing

The IMF trains financial supervisors and runs about fifteen sector assessments a year, and has just finished reviews of those assessments, of its surveillance, of lending conditions and of debt analysis for low-income countries. It urges the biggest members to correct global imbalances: America should save more, China consume more and Europe invest more. Lending commitments stand at $240 billion, with about three times that unused. She asked members to back the plan making the concessional trust self-sustaining: 39 countries have given assurances covering nearly 48%, EU support would lift that to 74%, against a 90% goal. New capacity-development pledges topped $100 million, and she closed with a Thai king's reminder that benefits must be cultivated patiently.

1. Opportunity and risk together

Speaking to EU finance ministers in Dublin, Georgieva said Europe must grow faster to keep its social model and should use the current leap in technology to do so. The gains come from reinventing products, processes and workflows, not from the technology alone, and AI's pace punishes hesitation. Europe has to sit inside the whole value chain, as provider, builder and adopter, yet it now trails the United States, China and several Asian suppliers.

2. Four channels of impact

In the short run the AI building boom is a positive demand shock that lifts growth and inflation, amplified by its appetite for energy. Later it becomes a supply shock: global potential growth could rise by roughly a tenth to eight tenths of a point a year, with Europe aiming for the upper half; the inflation effect depends on timing and on whether labour disruption erodes consumer demand. It could touch up to sixty percent of jobs in advanced economies, widening polarisation and hollowing out the middle. In between lies a period of maximum risk, since disappointment tends to come first and frontier models may outrun oversight.

3. Financial stability

An AI-led market correction ranks among the risks taken most seriously. Rising leverage could force selling, circular financing between investment, debt and revenue commitments could reverse, and large cross-border holdings of American shares would spread losses worldwide. Supervisors must make sure the system can withstand that test.

4. What Europe should do

Europe will have to build AI as well as adopt it. It ranks well on readiness, with seven of the top ten countries, but firms face bank-dominated finance, heavy regulation, some of the highest power prices in the world and narrower adoption than American firms. Five priorities follow: patient risk capital and a pan-European venture industry, together with a rethink of taxation as income shifts from labour to capital; an energy union and data centres sited where power is cheap; the optional 28th corporate regime to ease entry and exit; smoother job transitions through retraining and protection of workers rather than posts, citing Finland and Denmark; and a state that leads by adopting AI and building digital public infrastructure. Europe's AI rulebook looks prescient, but guardrails only matter if there is something to guard, so competitiveness must be preserved.

1. Why enlargement still matters

Speaking at a Brussels think tank as the IMF launched a paper on the Western Balkans and Moldova, Kristalina Georgieva called enlargement an engine of convergence. The world is harder than in 2004, with growth near three percent, rising trade barriers and demographic and fiscal strain, yet a wider single market should make Europe more resilient. In earlier rounds, joining regions saw income per head climb by more than thirty percent within ten years, and existing members gained too. A new capacity development centre in Rome will support the candidates.

2. What the new paper finds

Candidates could lift income per person by thirty to thirty-five percent in a decade. About two-thirds of the gain is productivity, which has to be earned through investment, innovation and competition, and which also keeps talent at home. Three engines each supply roughly a third: reforms anchored in EU law, access to the single market and effective use of EU money, all resting on strong governance.

3. A shared responsibility

Candidates must apply the rules faithfully, avoiding gaps and needless customisation, while the EU must make its market deeper and more seamless. A larger Europe is stronger if it is also more integrated, and she closed on optimism that Europe should believe in itself.

1. A harder job for central banks

Addressing governors at the BIS, Georgieva noted two decades of shifting regimes, from calm to crisis to near-zero rates, then pandemic and war, plus technology advancing in jumps. Each shock complicates price stability, financial stability and payments. She concentrated on price stability and three questions about it.

2. Demand management under an energy shock

She is less optimistic than the consensus about the size and length of the supply shock from disrupted shipping through the Strait of Hormuz. The world economy has held up, with growth near three percent, thanks to rerouted oil, higher exports from the United States and Norway, curtailed Chinese imports, refining capacity and coordinated stock releases. Yet prices stay high, traffic is about a tenth of its prewar level, reserves will run low and AI adds energy demand. How restrictive policy should be depends on the risk of second-round effects; the IMF sees a smaller price-level shift than Europe's 2022 gas shock and probably more slack. Emerging market frameworks have matured.

3. What AI means for monetary policy

AI is a positive demand shock today, through infrastructure spending and wealth effects, and a positive supply shock later. Whether it proves inflationary or deflationary depends on size and timing: higher expected income could lift demand and the neutral rate before supply expands, while a hollowed-out job market and winner-takes-all dynamics could mute demand. A return to ultra-low inflation and rates is ruled out for now. Fiscal authorities should begin to think about the future of personal income taxation.

4. High debt and fiscal dominance

Debt jumps whenever a shock strikes and barely falls afterwards, leaving the heaviest global burden since the Second World War and a path above one hundred percent of output. Inflation is stubborn and rate-cutting cycles look finished. Ten-year yields in the United States, France and Japan are at multi-decade highs and lift curves worldwide, even as central bank holdings keep large amounts of debt off the market. Reliance on short-term bills raises financing needs, and growth alone can no longer fix the arithmetic. Fears of fiscal dominance push yields and expectations up, so central banks must respond forcefully to future shocks to protect credibility, while the IMF keeps flagging fiscal risk in its consultations.

5. Five features of success

Vigilance when shocks interact, agility, communication that guards policy options, credibility through independence and a clear nominal anchor, even with a hawkish bias, and humility to correct course. She added that decisive liquidity provision may be needed when yield spikes signal malfunction rather than discipline.

1. Why payments matter, and what is new

Speaking at Jackson Hole, Managing Director Kristalina Georgieva argued that faster and cheaper cross-border payments are worth pursuing because high costs and curbs on correspondent banking push activity into informal channels and hold back trade in digital services, including AI. Domestic payment innovation has already helped poorer households, but cross-border progress is uneven. Many projects now link national systems, from the ECB's instant-payment platform to schemes in Southeast Asia and southern Africa and a project at the BIS. Whether private ledger technology can transform this at global scale is unknown, yet tokenization and stablecoins may make global finance more fluid, spreading risks faster and raising the price of policy mistakes.

2. Regulation must be coordinated

Her first argument is that these instruments need an internationally coordinated response: strict and ideally harmonized rules on reserve pools so coins can always be redeemed at par, the same rules for similar instruments to limit arbitrage, protection against excessive loss of bank deposits since banks fund households and small firms, and modernization where activity has drifted to lightly regulated nonbanks. Cooperation on data, legal frameworks and interoperability is essential.

3. Emerging markets need stronger buffers

Stablecoins can facilitate tax evasion, currency substitution and leakage around capital controls, which still shield about a quarter of IMF members, some of which also rely on financial repression. Central banks should supervise domestic stablecoin intermediaries and build larger foreign exchange reserves, while governments broaden tax bases and cut primary deficits, even though appetite for consolidation is weak after generous support.

4. Issuer countries and fiscal discipline

Countries whose assets back stablecoins, above all the United States, can tap a pool of roughly fifteen trillion dollars held abroad and may lower funding costs, perhaps at others' expense, but such savings are marginal and no substitute for sound policy. Benchmark yields in the United States, France and Japan are at multi-decade highs and lift curves worldwide. Central banks must protect price stability and not rescue public finances through lower rates or asset purchases; the remaining answer is fiscal choice between lower spending and higher taxes, without further delay.

5. Closing note

Technology tends to knit a fragmented world back together, and she is confident cross-border payments will eventually change, provided the right conditions are set to capture the benefits and manage the risks.

1. The shock and the lessons of 2022

Three months into the Middle East war, world oil supply is about thirteen percent below its prewar level and liquefied gas about twenty percent, with very uneven effects. Georgieva first asked Europe to help the hardest-hit poor countries reach fertilisers and diesel. She praised decades of transition policy, which cut the energy intensity of European output by more than forty percent and ended dependence on Russia; today's gas shock is much smaller than in 2022, though the oil shock is almost as large.

2. Targeting support

Most new aid measures are temporary and cheaper than before, but again largely untargeted, which mutes the price signal and reduces energy saving. In 2022 over two-thirds of support was poorly aimed; protecting only the poorest forty percent of households would have saved almost two-thirds of the cost, whereas the richest fifth received nearly three times more than the poorest. The IMF therefore urges targeted help that still preserves savings.

3. Why an energy union

Three facts make the case. European industry pays two to three times more for electricity than American and Chinese rivals, and the doubling of real industrial energy prices has cut value added in energy-intensive industries by an estimated eighteen percent. Prices are also volatile and dispersed, with some countries paying over three times as much as others. And the union still imports more than half its energy, so outside disruptions pass quickly into prices.

4. How to get there

Speed up cheap renewables, integrate the internal market and keep private incentives right. Completing planned interconnectors, with more solar, wind and nuclear power, could lower average electricity prices by more than ten percent, and prices often fall on both sides of a new link; part of export revenue can be shared with the public. A common blueprint for supply, storage and interconnection is needed because wind and sun are unevenly spread. The carbon market should be protected: its revenue could reach about one percent of output, more than the public investment cost of the transition. Europe should use the crisis and act as one.

1. Africa as the next growth engine

At the Africa Forward Summit in Kenya, Georgieva called Africa the place where the world will find its next growth engine, but in a world of widening imbalances: export-led economies squeeze room in supply chains, big deficit countries absorb a large share of capital, and the sharpest gap is demographic, with capital in ageing societies and growth potential in young ones.

2. What countries should do

Africa should use its own savings better and attract the vast global pools of equity and bond savings that now avoid the fastest-growing regions, through credible policy, action against corruption and less red tape. Removing trade barriers under the continental free trade area could raise income per head by over ten percent. Unsustainable debt should be restructured or reprofiled, unproductive borrowing avoided and financing moved from debt towards equity through deeper capital markets.

3. What the IMF does

Concessional lending to Africa has risen from eight to thirty-six billion dollars, helped by channelling reserve assets, and programmes are run as partnerships. The Fund is reforming the debt architecture, has added a third African seat on its board and is pushing for fairer representation. Good policies pay: closing half the gap with emerging markets in regulation and governance could raise sub-Saharan output by up to twenty percent within a decade.

1. Uncertainty as the new normal

At a Bangkok conference on Asia in 2050, Georgieva said the new Middle East conflict, whose regional and global effects the IMF is quantifying, puts energy security and confidence at stake for most of Asia. Uncertainty is now the permanent condition rather than a passing phase, so governments and firms need strategy, financial strength and above all agility, and should concentrate on what lies within their own control.

2. A golden quarter-century

Since 2000 the region built policy frameworks, financial oversight, reserves and trust, which brought stability, low inflation, investment, private-sector growth and poverty reduction on a vast scale. Asia now produces two-thirds of global growth and nearly forty percent of world trade.

3. First challenge: productivity through AI

AI could add up to eight tenths of a point to annual growth in Asia, provided large public and private investment in digital infrastructure and skills, fewer regulatory barriers, deeper stock and bond markets and sensible guardrails. Singapore tops the IMF's preparedness index, China and Korea lead in adoption, India is democratising access and Japan uses robotics; several Southeast Asian economies and Korea have out-of-court debt restructuring.

4. Second challenge: people

AI will not help everyone: middle and entry-level jobs are most at risk, which matters for young people, so workers must be taught to keep learning. Asia will age faster than any region, with the number aged over sixty-five doubling by 2050, yet conditions differ: Japan is old, China and Korea are ageing quickly, India, Bangladesh and parts of Southeast Asia stay young, so some need higher participation and others more jobs.

5. Third challenge: trade and integration

Openness can be a weakness, but trade finds a way around barriers, and Asia can act alone through regional integration: lowering nontariff barriers could raise regional output by about 1.8 percent in the long run. She urged an ambition beyond trade agreements, towards an internal market like the European one, helped by Asia's lead in digital payments, which will feature at the Annual Meetings.

1. A stalling convergence engine

Speaking to the Commission's competitiveness seminar in Leuven, Georgieva said Europe's convergence engine is stalling because the single market is unfinished and complacency about competing has set in, while threats mount: Russia's war to the east and a dented transatlantic alliance to the west, where a trade breakdown could cost the Union around 0.3 percent of output on top of half a point already lost.

2. Three hard facts

Europe's economy is shrinking in relative terms, since EU output once matched America's; it has lost its productivity lead in both technology and other sectors; and its firms are less competitive and struggle to grow, with promising startups moving abroad. The core objective must therefore be much faster productivity growth, through national structural reforms and completion of the single market.

3. Where regulation and fragmentation bite

Regulatory barriers to trade inside the Union are two to three times those between American states, moving workers is roughly eight times costlier, energy costs about double American levels, and a banking system split into twenty-seven pieces leaves a sixty-trillion-euro financial system holding timid money. She called for a deep regulatory clean-up, an end to national gold-plating, a 28th corporate regime created by Regulation rather than Directive, easier labour mobility through recognised qualifications, portable social security and flexible housing, one energy blueprint with interconnectors and faster permits, more joint EU borrowing for shared goods such as defence, and one unified financial system.

4. The payoff and three practical steps

Cutting internal frictions to American levels could raise EU productivity by about twenty percent, and Cyprus, Greece, Ireland, Portugal and Spain show reforms pay. She also backed rules-based trade and recent deals with Mercosur and India. Her three suggestions: make the single market a single-minded obsession under one empowered coordinator, set a hard deadline and plan backwards, and replace the image of a regulatory superpower with one that sweeps away obsolete rules, using AI for the clean-up.