Global economy in tug-of-war between oil shock and AI boom: IMF chief

The global economy has weathered the oil shock caused by the closure of the Strait of Hormuz "better than feared" due to various factors, including an investment boom in artificial intelligence, IMF Managing Director Kristalina Georgieva has said.

"What started out as a US phenomenon with AI is now becoming a growth engine for the global economy, with other countries ramping up construction of data centres and other infrastructure," Georgieva told journalists on Tuesday.

She said the global economy had "weathered the energy shock caused by the closure of the Strait of Hormuz better than we feared" due to a combination of factors, including drawdowns of oil and gas reserves and increases in non-Gulf supply.

"And it is enjoying the tailwinds from an AI investment boom, most notably in the US, where both corporate earnings and consumer demand remain strong," Georgieva said ahead of the G-20 finance ministerial meeting in Asheville, North Carolina, next week.

She said the global econom