‘Countries are defying gravity at all income levels’: how long can global economy resist chaos?

AI desk brief

The IMF says the global economy has remained resilient despite shocks, but warns that this resilience is being bought at a cost: higher fiscal deficits, rising public debt and bond yields, and inflation risks that could keep real rates elevated. It says advanced-economy debt is headed from 108% of GDP last year to 115% in five years, while energy support measures tied to the Iran conflict have already cost about 0.5% of global GDP.

The article also flags a potential AI-driven market setback as investors grow uneasy about borrowing, spending commitments and future profitability in the sector. South Korea’s Kospi posted its biggest weekly loss since October 2008, while US inflation data pushed expectations for further rate increases higher and knocked 2% off the Nasdaq from Monday to Thursday.