FX.co ★ IMF flags growing risks from AI to trade tensions

The International Monetary Fund is concerned, as always, but this time with a high-tech twist. Mounting trade tensions, uncertainty surrounding artificial intelligence, and an increasingly unpredictable global economy have landed on the Fund’s growing list of worries. Yet, despite the shifting landscape, the IMF continues to hope for resilient growth and a gradual path to disinflation.

The warnings came via the communiqué of the International Monetary and Financial Committee, which represents the IMF’s 191 member countries. The message was clear: a range of intersecting risks, including sluggish growth, escalating debt burdens, geopolitical conflicts, climate shocks, and global imbalances, are challenging traditional economic playbooks.

“The global economy is undergoing a profound transformation,” Saudi Finance Minister Mohammed Al-Jadaan, who chairs the committee, said. “Major policy shifts in trade and other areas are reconfiguring global markets and policy frameworks, heightening uncertainty.” In other words, the global outlook has reverted to a wait-and-see approach.

Still, the IMF strikes a cautiously optimistic tone. Even the very forces fueling anxiety — digitization, automation, shifting demographics — could present opportunities for countries agile enough to adapt. That is, nations that can simultaneously manage monetary policy and code-switch into the AI era may come out ahead.

However, the Fund warns that the path to disinflation will be uneven. The United States, with its renewed enthusiasm for tariffs, may find inflation more persistent than anticipated, while China risks drifting toward deflation. As always, markets should prepare for both scenarios.

The communiqué reiterated the importance of independent central banks and data-dependent policy frameworks. This is a well-intentioned ideal, even though the data often provides more surprises than clarity to those shaping policies based on it.

The Fund also urged closer monitoring of emerging vulnerabilities, ranging from AI to non-bank financial institutions and digital assets. The language was careful: innovation should not be stifled, but risks need to be understood and contained.

Although the global outlook remains highly complex and defined by overlapping risks, the IMF maintains a measured sense of optimism. The organization is not alarmed, but it is professionally concerned.