IMF Chief praises emerging markets, cautions on future shocks

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has commended the resilience and growth of emerging market economies, while issuing a stark warning about the challenges posed by depleted fiscal buffers and rising debt levels.

Speaking at the 2026 AlUla Conference for Emerging Market Economies in Saudi Arabia on Tuesday, Georgieva stated that the pragmatic policies of these nations are paying significant dividends.

“Good policies pay off,” she declared, highlighting that emerging markets are now projected to grow at around 4% this year, far exceeding the 1.5% growth forecast for advanced economies. Their share of the global economy has more than doubled since 2000, now standing at over 56%.

The IMF chief credited this strength to institutional reforms, including more independent central banks, clearer inflation targets, and a growing adoption of fiscal rules to enforce budget discipline across the developing world.

A Note of Caution

Despite the positive outlook, Georgieva urged caution. She noted that growth in these economies still lags behind pre-pandemic trends, a concern amplified by the expectation of future global shocks.

“We will surely experience more shocks—but face them with depleted fiscal buffers, high spending pressures, and rising debt levels in many countries,” Georgieva cautioned.

Two Key Priorities

To navigate these challenges and sustain growth, the IMF Managing Director outlined two critical policy priorities for emerging markets:

1. Unleash Private Sector-Led Growth: This involves cutting bureaucratic red tape, deepening financial markets, strengthening institutions, and crucially, equipping young people with the skills needed for the jobs of the future.
2. Step Up Regional Integration: In an era of shifting global alliances and trade patterns, Georgieva pointed to new opportunities for cooperation. She cited regional blocs like the GCC, ASEAN, the African Continental Free Trade Area, and Mercosur as examples where lowering barriers can preserve trade as a key engine for growth.

The conference, now in its second year and hosted by Saudi Arabia, has seen increased attendance and engagement. Georgieva praised it as a vital dedicated space for dialogue and leadership among the world’s emerging economic powers.

“In a more fragmented world, you come together to strengthen your ties,” she told attendees, emphasizing the importance of building mutual understanding to foster cooperation.