From October 20 to 22, along the banks of Shanghai's Huangpu River, the 2026 Sustainable Global Leaders Conference will return once again. Nobel laureates and Turing Award winners will take the stage to discuss the future and trends of technology, and the internet-famous professors who "rescue" people from anxiety and involution, Macfarlane and Xiang Biao, will hold a live dialogue. Places are limited, so those who hesitate will miss out. Let us join together for this appointment with sustainability. [Click to register] By Zhao Lan, Sina Finance Hong Kong desk, reporting from Bangkok.
The International Monetary Fund (IMF) and World Bank Group autumn meetings are drawing to a close. During the meetings, IMF Managing Director Kristalina Georgieva repeatedly stressed that "winter is coming," setting a warning tone for the global economic outlook. She said the phrase carries a double metaphor: it points both to the energy demand pressures brought by the arrival of winter in the Northern Hemisphere and also serves as a metaphor for the "economic winter" facing the global economy as multiple risks pile up. Although the IMF's latest World Economic Outlook slightly raised its forecast for global economic growth in 2026 to 3.1%, 0.1 percentage points higher than the July projection, Georgieva explicitly warned that after successive shocks, economies are generally weary and complacent, and the resilience of the global economy "may soon reach its limit."
The era of high interest rates is far from over, and the window for fiscal repair is narrowing
The first pressure of "winter" comes from the persistence of a high interest rate environment and the exposure and expansion of fiscal risks. Georgieva made clear that the era of high interest rates is not only far from over, but may even last longer. Georgieva said that global energy and food prices are rising again, causing inflation to rebound broadly across countries. Affected by geopolitical conflicts in the Middle East, global oil inventories have approached warning levels that could trigger a sharp spike in prices. The IMF expects global headline inflation to rise from 4.1% in 2025 to 4.7% in 2026, with the previous steady decline in inflation facing interruption.
The transmission effects of high interest rates are becoming fully visible across financial markets, companies and households. At the level of financial markets, U.S. Treasury yields, regarded as the anchor for global asset pricing, have continued to climb, with 30-year U.S. Treasury yields once breaking above 5.3%, the highest since 2007, pushing global sovereign bonds collectively into a bear market. The three-layer transmission path of high interest rates is the core logic of current asset pricing. First, the rise in the risk-free rate lowers valuations for all duration assets, and capital continues to shift from equities into short-term bonds and high-yield deposits. The valuation center of global equity markets is moving lower, with long-cycle, high-valuation sectors under the greatest pressure. For example, South Korea's KOSPI index, which led global gains in the first half of the year, retreated more than 40% from its high in the second half, with trading volume shrinking by more than 70% from its peak. If the risk-free rate continues to rise and keeps pushing up the discount rate for equity assets, global capital will continue to shift from risk assets to high-yield deposits and short-term bonds.
Second, financing premiums for companies are rising and capital expenditure is contracting. The IMF estimates that interest expenses for non-financial companies globally will rise 22% in 2025-2026. Small and medium-sized enterprises are hit far harder than large multinationals, with investment contraction and layoff pressure concentrated in traditional manufacturing sectors outside the AI track. Third, household balance sheets are under pressure. Floating-rate mortgages are pushing up monthly payments and squeezing disposable income, restraining optional consumption such as durable goods, travel and luxury items, and further weighing on the momentum of domestic demand recovery.
Georgieva called on global policymakers to complete emergency repairs before fiscal "cracks" widen. She stressed that countries should seize the current window to broaden sources of fiscal revenue, optimize spending structures and improve public financial management. In the face of rising energy and food prices, she argued that the core of fiscal policy should be to "protect people, not prices," that "now is the time to reasonably raise household incomes," and that "(there is a need for) fiscal spending and improved public management." Georgieva rejected broad price subsidies and instead advocated targeted cash transfers and minimum-income safety nets to avoid distorting price signals and expanding government deficits. Georgieva said, "It may be harder to deal with in the future, so countries must put their own 'house' in order before the cracks grow wider."
At this year's meetings, the IMF repeatedly warned that high inflation, high debt levels and persistently rising U.S. Treasury yields are making global fiscal consolidation more urgent. According to IMF data, global public debt as a share of GDP is approaching 100%, already at a post-World War II historic high, and is expected to continue rising. Rising interest rates amplify debt-service costs, with interest payments in advanced economies exceeding 7.2% of fiscal revenue in 2026; for low-income countries, the debt-service share exceeds 16%. High interest rates are devouring the fiscal budgets of many countries, crowding out infrastructure, social security and human capital investment. The IMF estimates that if the 10-year U.S. Treasury yield remains above 4.7%, interest expenses on the stock of global sovereign debt will increase by about $1.2 trillion over three years, triggering liquidity shocks in some sovereign markets.
Dividends and risks coexist as the IMF takes a balanced line on AI
AI was the most closely watched topic at this year's Bangkok meetings and is one of the few growth engines for the current global economy. But unlike one-sided optimistic market narratives, the IMF offered a very balanced judgment. The IMF acknowledged AI's supporting role for the global economy. According to IMF data, continued growth in AI infrastructure investment has directly offset part of the negative impact of energy shocks and helped the global economy maintain growth of around 3%. From 2023 to 2025, global AI-related trade grew 29%, far above the 8.3% growth in overall global trade during the same period. Excluding AI-related trade, global trade growth over the same period was only 4.6%. The IMF estimates that the AI investment boom could boost growth in advanced Asian economies by 0.5 to 1 percentage point, while emerging economies could also gain a growth dividend of 0.2 to 0.8 percentage points. Asian economies such as China and India are among the main beneficiaries of AI trade expansion. The IMF estimates that over the medium and long term, AI can raise potential growth in advanced economies by 0.5-1 percentage point and in emerging economies by 0.2-0.8 percentage points. But Georgieva also flagged short-term valuation risks from AI, arguing that its rollout is not happening that quickly.
IMF Deputy Director of the Monetary and Capital Markets Department Athanasios Vamvakidis also issued the same warning during the meetings, saying the market may be overestimating the pace of AI commercialization. If future AI capital expenditure slows or profitability falls short of expectations, related assets could see sharp repricing, posing a challenge to current optimistic market expectations. In addition, the IMF emphasized AI's impact on the global labor market. The IMF assesses that about 40% of jobs worldwide will be affected by AI. High-skilled jobs will be replaced or required to become more efficient, while low-skilled jobs face a higher risk of replacement. In addition, the digital divide between countries will also widen. The World Bank simultaneously released supporting research in Bangkok, noting that low-income countries lack computing power, electricity and digital infrastructure and find it difficult to participate directly in the AI dividend, and that technological divergence will exacerbate divergence in global growth.
In her speech, Georgieva also suggested a division of labor between the public and private sectors, arguing that the private sector is the core actor in AI innovation and job creation, and that governments should not lead AI industrialization but should be responsible for institution-building. She said the government's task is to improve the business environment, strengthen digital and energy infrastructure, and implement active labor market policies. Georgieva repeatedly warned of the risk of "excessive concentration in the tech industry," taking a stance in favor of competition policy and "antitrust" among countries, while remaining cautious about "large-scale government subsidies for the AI industry," echoing the AI regulatory frameworks currently being discussed in the United States and Europe.
"Global imbalances": China, the U.S. and Europe need differentiated efforts to address shortcomings
The continued expansion of global economic imbalances was another alarm sounded by the IMF at this year's meetings. According to the IMF's July External Sector Report, worsening excessive global current account imbalances reflect uneven growth models across countries and will raise macro-financial risks and intensify trade frictions and economic fragmentation. Georgieva said the main contributors to global imbalances are concentrated in the three major economies of China, the United States and Europe. The IMF believes that current account imbalances are essentially imbalances between domestic saving and investment, not a matter of exchange rates or bilateral trade balances. Georgieva explained that the root of the U.S. deficit is low saving and continuously expanding fiscal policy; China's high surplus mainly comes from a high-saving environment in the private sector; and the euro area suffers from long-term weak investment and sluggish productivity. Georgieva summed it up as follows: "China needs to spend more; the US has to save more; Europe has to invest more."
Georgieva argued that large-deficit economies such as the United States must raise national saving, shrink fiscal deficits and reduce public debt. The United States cannot rely solely on nominal growth to digest its high debt. If U.S. fiscal adjustment is delayed, rising Treasury yields and capital outflow risks will create financial spillovers globally. For surplus economies represented by China, the policy focus is to boost domestic consumption, promote a transition in the growth model from export-led to domestic-demand-driven, and achieve rebalancing by improving the social security system and unlocking household consumption potential. For some euro area countries with insufficient investment, Georgieva said they should pursue "structural reforms" to enhance competitiveness, expand real investment, especially in green and digital fields, and repair long-stagnant potential investment growth. Georgieva also clarified at a press conference that surpluses or deficits are not inherently bad; it is "excessive imbalance" that is the risk.
IMF Managing Director: "Fix the roof before winter arrives"
Georgieva advised that "complacency is a more dangerous enemy than risk itself" and "do not wait until winter arrives to repair the roof." The global economy is not standing on the edge of a cliff, but headwinds are blowing from all sides. The asset repricing brought by a prolonged period of high interest rates is already under way; the dividends and valuation risks of the AI wave will continue to diverge; and the process of global economic rebalancing will also reshape growth prospects and asset attractiveness across different economies. The IMF believes the policy window is limited, and countries must adjust fiscal buffers in advance and push forward structural reforms so that the global economy can pass smoothly through a "troubled winter."
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