‘Countries are defying gravity’: how much longer can global economy resist chaos?
Sky-high oil prices and geopolitical turmoil have made less of a dent than feared … just don’t bank on it to last
TL;DR
- The global economy has shown surprising resilience to recent shocks, defying initial fears of a major crisis.
- This resilience has been partly fueled by AI investment, but has come at a significant cost due to government support measures for soaring oil prices.
- The IMF warns that this resilience is under strain, highlighting unsustainable public finances and rising government debt, especially in rich countries.
- A major risk identified is the potential for an AI market crash, driven by expectations outpacing productivity gains and highly leveraged investors.
- Recent market tremors, such as a significant drop in South Korea's Kospi index, may indicate that fears of 'near-term disappointment' are already materializing for some investors.