WASHINGTON, April 16: IMF Managing Director Kristalina Georgieva and other top economists have warned that global economic imbalances are widening again amid a fresh energy shock from the Persian Gulf conflict, which has pushed up oil prices and heightened financial risks worldwide.
Speaking at a high-level panel, Georgieva said imbalances between surplus economies like China, Germany, and Japan and the large US deficit are increasing and may be structural rather than temporary. She warned that rising energy costs are hitting oil-importing countries hardest and could worsen debt servicing pressures.
Bank of England Governor Andrew Bailey highlighted growing risks from higher public debt and potential volatility in sovereign and private credit markets, noting that sudden capital flow reversals could trigger sharp economic adjustments. Other economists said imbalances stem from policy choices and structural issues, particularly China’s high investment and low consumption model.
Experts also warned that global imbalances have nearly doubled in 15 years, increasing exposure to currency and interest rate shifts. They stressed that tariffs alone cannot resolve trade gaps, and broader macroeconomic reforms are needed to avoid financial instability similar to past crises. (IANS)
