Al-Jadaan: Ending Conflicts, Securing Peace Are Essential to Sustainable Growth

(L/R) Saudi Arabia's Finance Minister Mohammed Al-Jadaan and IMF Managing Director Kristalina Georgieva
speak during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
(L/R) Saudi Arabia's Finance Minister Mohammed Al-Jadaan and IMF Managing Director Kristalina Georgieva speak during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
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Al-Jadaan: Ending Conflicts, Securing Peace Are Essential to Sustainable Growth

(L/R) Saudi Arabia's Finance Minister Mohammed Al-Jadaan and IMF Managing Director Kristalina Georgieva
speak during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
(L/R) Saudi Arabia's Finance Minister Mohammed Al-Jadaan and IMF Managing Director Kristalina Georgieva speak during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)

Saudi Finance Minister Mohammed Al-Jadaan said the global economy’s ability to withstand crises depends on adopting a “unified strategic vision and swift reforms,” warning that excessive market optimism may be masking serious geopolitical risks, particularly conflicts that threaten supply security.

Al-Jadaan made the remarks at a joint press conference with Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), following a meeting of the International Monetary and Financial Committee (IMFC), during the IMF–World Bank Spring Meetings.

The committee concluded its session by adopting the “Diriyah Principles,” described as a landmark framework for IMF quota and governance reform, signaling a renewed phase of multilateral cooperation amid heightened global uncertainty.

Peace as a Foundation for Sustainable Growth

Al-Jadaan said the global economy has faced repeated shocks in recent years driven by wars and conflicts, including the latest escalation in the Middle East.

Beyond the severe humanitarian toll, he said, these shocks have global economic consequences that disproportionately affect the poorest and most vulnerable populations. He cautioned that this is unfolding at a time when policy space has narrowed and international cooperation has weakened.

He emphasized that effective policy responses depend on how shocks transmit through domestic economies, requiring timely and flexible measures supported by credible frameworks and strong international coordination.

Ending wars and securing lasting peace, he said, are indispensable conditions for sustainable growth and long-term stability.

Conflict Risks and Implications for Energy Security

In its statement, the IMFC said the global economy has shown resilience despite repeated shocks, including wars and conflicts. However, it described the Middle East conflict as a significant new global shock, with its economic impact contingent on its duration, intensity, and geographic spread.

The committee noted that damage to infrastructure and disruptions to transportation already pose serious risks to the global economy, despite efforts to sustain energy flows, including rerouting shipping and trade routes to safeguard supply chains.

Members stressed that the impact of the shock varies widely across countries. A prolonged conflict could keep fuel and fertilizer prices elevated, disrupt supplies of key inputs, and intensify risks to energy and food security, global growth, inflation, and external balances.

The statement added that tighter financial conditions and potential spillovers to financial stability could further cloud the outlook. These risks are compounded by deep structural shifts in technology, demographics, and climate-related challenges that are reshaping economies and testing their resilience.

Economic and Financial Policy Priorities

Against this backdrop of heightened uncertainty, the committee said the top priority is to safeguard macroeconomic and financial stability while supporting strong, broad-based growth through credible, timely, and adaptable policies.

Central banks reaffirmed their commitment to price stability, emphasizing that independence and clear communication are essential to maintaining policy credibility and anchoring inflation expectations.

On fiscal policy, the committee said governments should calibrate spending within credible medium-term frameworks to ensure debt sustainability. Where fiscal space permits, temporary and targeted measures can be used to protect vulnerable populations.

Members also reaffirmed their commitment to international standards and to monitoring risks to financial stability. This includes strengthening oversight of systemic risks linked to artificial intelligence, nonbank financial institutions, and digital assets, while leveraging the benefits of technological innovation.

Structural Reforms and International Cooperation

The committee underscored the need to advance structural reforms to encourage private-sector investment, boost productivity, and strengthen energy security.

Members pledged continued cooperation to address excessive global imbalances and trade tensions, build more resilient supply chains, and support a fair and open global economy. They also reaffirmed exchange rate commitments made in April 2021.

The statement welcomed the IMF Managing Director’s Global Policy Agenda and highlighted the IMF’s central role in supporting countries through policy advice, capacity development, and financial assistance in coordination with other international institutions.

Supporting Vulnerable Countries and Addressing Debt

The IMFC reiterated its commitment to supporting countries in promoting stability and growth, with particular focus on low-income and fragile states affected by conflict, especially those facing rising debt pressures.

Members pledged to improve sovereign debt restructuring processes, including under the G20 Common Framework, and to advance work through the Global Sovereign Debt Roundtable.

The committee welcomed the updated “Restructuring Playbook” and called for greater transparency from all stakeholders, including private creditors.

It also urged stronger support for countries with sustainable debt facing short-term liquidity challenges, including faster implementation of the IMF–World Bank “three-pillar approach” and completion of the review of the debt sustainability framework.

Strengthening Surveillance and Lending

The committee backed efforts to enhance IMF surveillance, emphasizing analytical rigor and evenhandedness, and said it looks forward to completing the Comprehensive Surveillance Review and the review of the Financial Sector Assessment Program (FSAP).

Members also supported ongoing work to strengthen the IMF’s lending framework, including the Review of Conditionality and program design, as well as efforts to develop monetary policy frameworks for countries experiencing crises.



Moody’s: Spending Restraint to Strengthen Saudi Arabia’s Fiscal Recovery in 2027

Saudi capital, Riyadh (Reuters)
Saudi capital, Riyadh (Reuters)
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Moody’s: Spending Restraint to Strengthen Saudi Arabia’s Fiscal Recovery in 2027

Saudi capital, Riyadh (Reuters)
Saudi capital, Riyadh (Reuters)

Credit rating agency Moody’s said on Tuesday that the fiscal recovery planned for Saudi Arabia in 2027 supports its view that prudent fiscal management will remain a key factor in spending and borrowing decisions.

The agency also noted that reprioritizing state investments could preserve fiscal space while economic diversification continues.

Commenting on Saudi Arabia’s Pre-Budget Statement for next year, the rating agency said that prolonged trade disruptions and additional spending have limited the fiscal improvement it previously expected.

However, it said, Saudi Arabia’s move to rein in spending in 2027 reinforces its view that prudent fiscal management will remain a cornerstone of spending and borrowing decisions.

For 2027, the government projects a spending decrease to SAR 1.392 trillion ($371.2 billion), alongside a 1% rise in revenue to SAR 1.202 trillion ($320.5 billion); this would narrow the projected deficit to around SAR 191 billion ($50.7 billion), equivalent to 3.6% of GDP.

Moody’s said the government's ability to reprioritize investments linked to Saudi Vision 2030 could preserve fiscal space while economic diversification continues. Focusing resources on projects with strong returns would likely help reconcile growth objectives with spending restraint.

As for oil, the agency expected that disruptions to strategic shipping routes will persist through the end of the first half of 2027, which could affect oil production. However, it noted that higher oil prices have cushioned the impact of lower production and exports in recent months.

Saudi Arabia's real GDP is expected to contract 3.6% in 2026, largely because of a sharp decline in oil activity, even as the non-oil economy continues to expand, according to the Ministry of Finance's Pre-Budget Statement for 2027.

The Ministry estimates that oil activity will decline by around 21.8% this year, while non-oil activities are expected to grow 3.2%, helping cushion the impact of lower oil output on the wider economy.

Non-oil activity grew 1.8% in the first half of 2026, lifting its contribution to GDP to a record 57.3%, the statement said.

Moody’s review reflects a credit assessment of the Pre-Budget Statement for 2027 that places more emphasis on the government's capability to recalibrate investment and prioritize spending efficiency while explicitly preserving its overarching economic diversification goals. This, it said, would help preserve fiscal flexibility amid geopolitical strains and global market uncertainties.


IMF Chief Warns Energy Shock, Growing Debt and AI Risks Threaten Global Growth

FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva participates in a press briefing at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 17, 2026. REUTERS/Elizabeth Frantz/File Photo
FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva participates in a press briefing at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 17, 2026. REUTERS/Elizabeth Frantz/File Photo
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IMF Chief Warns Energy Shock, Growing Debt and AI Risks Threaten Global Growth

FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva participates in a press briefing at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 17, 2026. REUTERS/Elizabeth Frantz/File Photo
FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva participates in a press briefing at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 17, 2026. REUTERS/Elizabeth Frantz/File Photo

The global economy is under threat from persistently high energy prices, record public debt and risks from the AI investment boom, International Monetary Fund Managing Director Kristalina Georgieva warned on Wednesday, urging governments to take protective fiscal and monetary policy measures.

In a speech previewing IMF and World Bank Annual Meetings next week in Bangkok, Georgieva said the world was being pulled in two directions -- a negative energy supply shock from the Middle East conflicts and a positive demand shock from artificial intelligence that is also fueling inflation.

"The combined impact of these two forces is highly uneven across the world," Georgieva said, adding that the AI boom was bypassing many countries.

New IMF growth forecasts to be released during the Bangkok meetings will show the biggest growth downgrades will come in economies ravaged by war, Georgieva said.

Georgieva did not indicate in her prepared remarks whether the ⁠IMF's latest World ⁠Economic Outlook would change the overall 2026 global growth forecast from the sluggish 3.0% rate forecast in July.

That forecast, which predicted a rebound to 3.4% growth in 2027, assumed the Strait of Hormuz would start to reopen in mid-July and return to pre-war conditions by March 2027. It assumed oil prices would average $89 a barrel in 2026 and $78 a barrel in 2027.

Georgieva said oil prices remain at $100 a barrel, with impaired refining capacity adding another $100 in "crack-spread" margins per barrel for key products including diesel. The winter heating season will boost demand as natural gas supplies remain restricted by threats to LNG shipping through the Strait of Hormuz, she added.

"Even if the war in the Gulf were to end soon, the problem of ⁠high energy prices will likely persist for some time," Georgieva said, adding that Brent crude oil futures predict high oil prices through 2027.

Higher energy prices are pushing up inflation, policy rates and benchmark bond yields, she said, noting that US, German and Japanese 10-year sovereign yields are now at their highest levels since 2007, 2009 and 1996, respectively, and still climbing.

Adding to the worries to be discussed by the IMF's 191 member countries next week is a growing public debt burden that is sapping growth and adding inflationary pressures, Georgieva said. The IMF says public debt is at the highest level since World War Two and is projected to exceed 100% of GDP before 2030.

Georgieva singled out advanced economies, led by the United States, as the "worst offenders" on debt loads, with debt-to-GDP ratios higher than emerging markets and low income countries.

Policymakers can no longer rely on higher growth rates alone to solve fiscal problems, Reuters quoted her as saying.

"And yet we don't see decisive action in the high-debt advanced economies where the need of the hour is for credible medium-term fiscal consolidation plans, ⁠supported in some cases by upfront ⁠fiscal measures, including to take some pressure off monetary policy," she said.

After five-and-a-half years of above-target inflation, Georgieva said inflationary pressures were persisting, from the AI build-out, energy and food price shocks, tariffs, higher defense spending and higher debt service costs.

"Now may be a good time for a prudently hawkish bias in many countries' monetary policy," Georgieva said, adding that rate hikes by the US Federal Reserve, the ECB and the Bank of Japan were "highly appropriate."

Georgieva highlighted other risks from AI, where investment as a share of GDP is likely to exceed that of railroads, the electricity grids or telecommunications infrastructure.

The rising economic and financial concentration puts pressure on AI companies to deliver productivity and earnings gains to justify lofty valuations, she said, warning that market disappointment could turn into "a far-reaching shock."

But she said IMF research suggests that AI, done right, could add a half percentage point of extra world growth annually.

AI preparedness is key, she said, including regulatory guardrails that "help manage AI's substantial perils, which include large-scale labor market fallout, serious cyber and stability risks and frontier models threatening to escape human control and run amok."

In addition to building fiscal strength, even at difficult political costs, Georgieva said governments should take other steps to boost growth, including reforms that would develop improved workforce skills, make corporate start-ups and wind-downs easier, boost energy security and streamline regulations.


Chinese Independent Refiners Boost Iraqi Oil Purchases, Traders Say

A Chinese-flagged oil tanker is moored at an oil terminal at Tsing Yi port in Hong Kong, China, March 19. (REUTERS/Joyce Zhou)
A Chinese-flagged oil tanker is moored at an oil terminal at Tsing Yi port in Hong Kong, China, March 19. (REUTERS/Joyce Zhou)
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Chinese Independent Refiners Boost Iraqi Oil Purchases, Traders Say

A Chinese-flagged oil tanker is moored at an oil terminal at Tsing Yi port in Hong Kong, China, March 19. (REUTERS/Joyce Zhou)
A Chinese-flagged oil tanker is moored at an oil terminal at Tsing Yi port in Hong Kong, China, March 19. (REUTERS/Joyce Zhou)

Chinese independent refiners have stepped up purchases of crude from Iraq and Qatar for October and November delivery to replace dwindling Iranian supplies, as exports from other Gulf producers through the Strait of Hormuz recover, traders said.

Strong demand for non-sanctioned Gulf crude from private refiners has helped support the market after supply disruptions linked to the US-Israeli war with Iran, according to Reuters.

Chinese refiners bought at least 12 million barrels of Iraqi and Qatari crude from trading houses Mercuria, Totsa and Trafigura, according to three traders close to the deals. One estimated total purchases at 15 million to 20 million barrels.

The cargoes were sold at premiums of $12 to around $20 a barrel to the ICE Brent ⁠benchmark on a delivered basis, the traders said.

Most of the purchases were Iraqi Basra Medium and Heavy crude, among the cheapest Middle East grades available.

Buyers included Hongrun Petrochemical, Qicheng Petrochemical, Qirun Petrochemical, Hualong and Chambroad Petrochemical, the sources said.

Iraqi oil has become the new benchmark for China's independent refiners due to its ample supplies and promptness, one trader said.

Hongrun and Shenchi Petrochemical also bought 3 million barrels of Qatar's al-Shaheen crude for arrival in early November, the sources said, speaking on condition of anonymity because they are not authorized to speak to media.

The refiners did not immediately respond to requests from Reuters for comment amid a holiday in China.

Mercuria and Trafigura declined to comment. TotalEnergies did not immediately respond to a request for comments.

The deals followed purchases of more than 20 million barrels of crude from West Africa, Canada and Colombia between late August and early ⁠September as Iranian supply dwindled after the US imposed a naval blockade on Iranian vessels in July.

Iranian Supply Falls

China's independent refiners have relied heavily on discounted crude from sanctioned producers, particularly Iran, in recent years.

But China's imports of Iranian oil nearly halved in September from a year earlier to 590,000 barrels per day, the lowest level since January 2023, according to data from analytics firm Kpler.

The volume of Iranian crude stored on vessels outside the blockade zone has ⁠more than halved to 45 million barrels from 100 million barrels in late July, Kpler said.

Its data showed that Iran did not export any crude in September for the first time since Kpler began tracking flows from the producer in 2013.

Refining Margins Weaken

As exports through the Strait of Hormuz recover, trading houses have lowered ⁠offer prices to stimulate demand from Chinese independent refiners, one trader said, adding that buyers were unwilling to pay spot premiums above $20 a barrel.

Refinery utilization rates in Shandong fell to about 55% by the end of September from nearly 60% at the start of the month, according ⁠to consultancy Horizon Insights, as margins deteriorated after China capped fuel price increases while crude feedstock costs surged.

Refiners were losing 250 yuan to 500 yuan ($37.29-$74.58) per metric ton by late September, compared with profits of about 500 yuan per ton in early September, according to Horizon.