Speaking at the Asia-Pacific Economic Co-operation (APEC) Leaders’ Summit in Seoul on Thursday, Georgieva likened the global economy to a catamaran cutting steadily through rough waters, describing it as steadied by two hulls, sound policy frameworks and a dynamic private sector.
Decades of hard work have resulted in good policy frameworks such as inflation targeting and fiscal rules, she said, noting that firms across APEC and beyond have quickly adjusted to shocks, strengthening supply chains and adapting to global transformations.
According to the IMF’s latest global outlook, world growth is projected at 3.2% in 2025 and 3.1% in 2026, slightly down from 3.3% in 2024. For the APEC region, growth is expected to moderate to 3.1% next year and 2.9% in 2026, compared to 3.7% last year.
On inflation, Georgieva said global price pressures are easing, with inflation expected to fall to 4.2% in 2025 and 3.7% in 2026. For APEC economies, inflation is forecast to remain close to 2%, particularly in emerging markets.
However, she cautioned that the outlook remains uncertain, citing potential risks from trade tensions, financial conditions, and the rapid adoption of artificial intelligence.
“We recognise the high uncertainty around this outlook,” she noted. “Global prospects will depend on easing trade tensions, the scope and speed of AI’s impact on productivity, and how consumers and firms respond to the policy shifts underway.”
Georgieva outlined four priorities to strengthen economic resilience: fixing public finances, preserving financial stability, advancing reforms to boost growth, and addressing excess imbalances.
She warned that public debt across APEC is projected to exceed 110% of gross domestic product next year, with some members approaching record highs last seen after World War Two. “This trend must be reversed to reduce borrowing costs and build buffers for future shocks,” she urged.
Turning to the financial sector, Georgieva said that while private investment in technology, particularly AI, offers major opportunities, it also poses risks of overvaluation. “We must guard against over-enthusiasm followed by abrupt reassessment and correction in financial markets,” she cautioned.
On growth, Georgieva called for a regulatory clean-up to remove red tape and legacy rules stifling innovation. “Private sector initiative remains the main driver of growth,” she said.
Finally, she urged economies to pursue both external and internal rebalancing, with high-saving countries encouraged to spend more and high-consuming economies to save more.
Georgieva emphasised that regional cooperation would be vital for shared prosperity. “As the trade landscape evolves, regional cooperation and integration can facilitate rebalancing and spur growth,” she said.
Concluding her remarks, she called on APEC leaders to maintain unity in turbulent times. “Sail forward together, it is the key to wise navigation,” she said.
–ChannelAfrica–
