At the World Economic Forum (WEF) Davos Summit, IMF Managing Director Kristalina Georgieva warned that the global economic horizon has darkened, with several nations facing a growing risk of recession. The IMF’s latest World Economic Outlook highlights that while global growth remains positive, momentum is weakening due to persistent inflation, high public debt, and escalating trade tensions.

Georgieva noted that the world economy has shown unexpected resilience after recent tariff shocks, but uneven recovery across regions poses serious challenges. Advanced economies are slowing as borrowing costs stay high, while some emerging and low-income countries struggle with mounting debt and limited fiscal space.

The IMF cautioned that financial vulnerabilities, especially in non-bank lending and shadow credit markets, could amplify risks if global liquidity tightens further. Meanwhile, Asia continues to be a relative bright spot, supported by strong domestic demand and technology-driven growth.

Despite the cautious tone, the IMF urged cooperation and policy discipline to prevent localized recessions from spreading globally. Georgieva emphasized that timely reforms, debt restructuring, and sustainable investment in innovation could still steer the global economy toward a soft landing rather than a downturn.