IMF committee warns conflicts, trade tensions threaten global economic resilience

The International Monetary and Financial Committee (IMFC) warned Saturday that escalating conflicts, trade tensions and supply-chain disruptions pose growing risks to the global economy, calling for credible policies and stronger international cooperation to rebuild resilience.

The warning came in a Chair’s Statement agreed by IMFC members at the conclusion of the committee’s 54th meeting during the 2026 World Bank Group-International Monetary Fund annual meetings in Bangkok.

The committee said the global economy had weathered the latest series of shocks better than expected, but financial buffers had been eroded and continued resilience could not be taken for granted.

Wars and conflicts continue to impose a heavy humanitarian toll, large economic costs and negative spillovers, with the poorest and most vulnerable bearing the greatest burden, it said.

What are the biggest risks to the global economy?

The IMFC identified escalating conflicts, trade tensions, supply-chain disruptions, high public debt and rising sovereign bond yields as major threats. It also cited rapid technological change, demographic shifts, extreme weather and geoeconomic fragmentation, warning that depleted buffers leave economies with less capacity to absorb additional shocks.

Further escalation of conflicts and trade tensions could disrupt critical trade routes, intensify commodity price pressures, including for refined energy products, and worsen energy and food insecurity.

Rising sovereign bond yields in major economies could also tighten global financial conditions at a time when many countries face high public debt and substantial refinancing needs.

The committee also highlighted uncertainty over the economic and financial implications of advanced intelligence technologies.

Despite those risks, global growth has remained broadly stable, supported partly by investment and trade associated with rapid technological advances, which could also lift productivity.

Economic outcomes remain uneven, however, leaving low-income countries and fragile states at risk of falling further behind.

IMFC calls for stronger fiscal and monetary frameworks

The committee urged governments to address fiscal vulnerabilities, advance consolidation where appropriate and use credible medium-term frameworks to rebuild buffers and ensure debt sustainability.

Fiscal policy should continue protecting vulnerable populations and priority investments that support productivity and growth.

Central banks should remain focused on price stability and adjust policy in a data-dependent and well-communicated manner, the committee said.

It stressed that central bank independence remained essential to maintaining policy credibility and anchoring inflation expectations.

The IMFC also backed reforms aimed at supporting private sector-led growth and using digitalization and advanced intelligence technologies to raise productivity while managing associated risks and ensuring the benefits were broadly shared.

It welcomed the Bangkok Blueprint, an initiative aimed at strengthening digital-finance safeguards, cyber resilience and international efforts to combat digital fraud.

Trade tensions and supply chains remain a concern

The committee called on countries to address excessive global imbalances and trade tensions, avoid distortive policies and strengthen supply-chain resilience through domestic reforms and multilateral cooperation.

It said secure and resilient energy flows and the principle of freedom of navigation were essential to global economic stability.

Members also reaffirmed their April 2021 exchange-rate commitments.

Debt vulnerabilities remain acute

The IMFC called for continued support for countries facing debt vulnerabilities, with particular attention to low-income and vulnerable middle-income economies, fragile and conflict-affected states and small developing states.

It reaffirmed its commitment to improving sovereign debt restructuring, including under the Group of 20 Common Framework, so that restructurings are more predictable, timely, orderly and coordinated.

The committee also called for greater debt transparency from all stakeholders, including private creditors.

It encouraged faster implementation of the IMF-World Bank Group’s three-pillar approach to support countries with sustainable debt and strong reform and growth agendas that nevertheless face short-term financing pressures.

Members also called for remaining assurances needed to support the IMF’s Poverty Reduction and Growth Trust to be delivered promptly.

Committee backs stronger, quota-based IMF

IMFC members reaffirmed their support for a strong, adequately resourced and quota-based IMF at the center of the global financial safety net.

They called for domestic approvals of the quota increase under the 16th General Review of Quotas to be completed without further delay and said the Diriyah Guiding Principles would shape future discussions on quota and governance reforms.

The committee welcomed recently approved reviews covering IMF surveillance, debt analysis, lending and capacity development and called for their prompt, effective and evenhanded implementation.

It also supported efforts to modernize IMF operations, strengthen enterprise risk management and improve the institution’s ability to respond to rapid changes in the global economy.

Thailand hosted the annual meetings, while the IMFC welcomed a one-year extension of Saudi Finance Minister Mohammed Aljadaan’s term as committee chair.

The committee’s next meeting is expected to be held in Washington in April 2027.