Saudi attacks could have global spillovers, IMF chief says

Recent attacks on Saudi Arabia could have “potentially negative spillovers for everybody, everywhere,” International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday.

Speaking at a news conference during the IMF and World Bank Annual Meetings in Bangkok, Georgieva said the Saudi economy was important for the region and the world. Her comments came as energy costs rise globally and multiple conflicts continue in the crude-rich region.

Georgieva also urged governments to make “urgent repairs” to public finances as bond yields rise and pressure grows over debt. “What is our loudest call to policymakers right now? Make urgent repairs to the fiscal house before the cracks widen,” she said at the meetings.

The IMF has warned that global public debt is at its highest level since the Second World War and is on track to soon exceed 100% of global gross domestic product.

Era Dabla-Norris, deputy director of the IMF's Fiscal Affairs department, said countries with high debt need room for spending pressures including defence, ageing populations and other priorities. She said yields had increased by an average of around 110 basis points since late February, especially on longer maturities.

IMF research projected that governments' average interest payments worldwide will rise from 2.3% in 2021 to 3.7% in 2031. In the United States, interest payments are projected to increase from about 2.8% of GDP before the pandemic to 5.7% in 2031, roughly equal to projected spending on Social Security, the IMF said.

The IMF's World Economic Outlook, released on Tuesday, raised its 2026 global growth forecast by 0.1 percentage points to 3.1%. It said investment in artificial intelligence was creating new economic activity, but warned that poorer countries were not benefiting as they face soaring energy costs.

Georgieva said the global economy “remains resilient in the face of very frequent repetitive shocks and in the face of uncertainty,” but added that “this resilience is reaching its limits.”