IMF: Global economy resilient but high public debts, uncertainty remain

The International Monetary Fund (IMF) on Thursday said the global economy has proven resilient, and a soft landing is within reach.

But the fund said that uncertainty remains significant, with risks tilted to the downside and medium-term growth prospects are lackluster.

The IMF made this known Thursday at the Managing Director’s Global Policy Agenda, titled “Secure A Soft Landing And Break From The Low Growth–High Debt Path”.

The fund said that inflation has moderated on the back of tight monetary policy and fading supply shocks, and growth is expected to remain steady.

“But uncertainty remains significant, with risks tilted to the downside; medium-term growth prospects are lackluster; public debt has reached record highs and is expected to approach 100 percent of GDP by 2030; and geoeconomic fragmentation threatens to undo decades of gains from cross-border economic integration.

“At the same time, transformative changes—the green transition, demographic shifts, and digitalization, including artificial intelligence—are poised to reshape the global economy, creating challenges but also opportunities.”

Against this background, the IMF said the key policy priorities are to secure a soft landing and break from the low growth-high debt path, and address other medium-term challenges.

Monetary policy should ensure inflation returns durably to the target, it said, and fiscal policy needs to decisively pivot toward consolidation to rebuild buffers and safeguard debt sustainability.

“Growth-enhancing reforms are urgently needed to lift growth prospects by boosting investment, job creation, and productivity.

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“Domestic policies must be complemented by multilateral efforts to support countries with debt vulnerabilities, protect gains from economic integration, accelerate climate action, and harness benefits of new technologies while mitigating the risks.”

As it has done since its founding 80 years ago, the IMF said it will continue to adapt to serve its members with tailored policy advice, financial lifelines when needed, and capacity development.

“The Fund will remain a strong advocate for multilateralism and economic integration as foundations on which to build a resilient and inclusive global economy.”