IMF meetings ignore US and China imbalances as AI boosts demand
Imbalances in the United States and China received little attention during the recent International Monetary Fund and World Bank annual meetings, as reported in Expansión on October 23, 2026.
Artificial Intelligence Demand Masks Structural Vulnerabilities
The annual meetings revealed a broad consensus regarding the extraordinary resilience of the global economy. Healthy corporate and household balance sheets alongside fiscal stimulus continue supporting growth despite geopolitical conflicts, rising oil prices, inflation, monetary tightening, and trade fragmentation.
Investment linked to artificial intelligence provides an extraordinary boost to demand. Spending concentrates on data centers, semiconductors, energy, and infrastructure. Elevated stock market valuations further stimulate investment and consumption.
Conversations in Washington centered on the transformative potential of artificial intelligence and the timing of productivity gains. Attendees also weighed the uneven impact across countries alongside the possibility of stock market corrections compounded by rising long-term interest rates. Looming in the background was the fear of a major cybersecurity incident.
Overlooked Imbalances in the United States and China
Governments and central banks expressed doubts regarding the sustainability of growth. High deficits and borrowing costs constrain fiscal policy, while high inflation limits monetary maneuvering room. Private-sector analysts remain optimistic, but critical structural questions received little attention from official global institutions.
The IMF meetings bypassed the large fiscal deficits and growing financing needs of the United States. Discussions similarly sidestepped China, which continues grappling with the aftermath of its real estate bubble. China remains overly dependent on investment and exports, showing insufficient domestic consumption and an extraordinary external surplus.
These two macroeconomic imbalances are closely interconnected. The strength of American investment allows for a relaxed view of the external deficit, though sustainability depends on future returns. Meanwhile, China’s excess production capacity persists because policies continue favoring production over consumption.
Strategic Autonomy Goals Drive Higher Investment Costs
National security concerns, technological competition, and the pursuit of strategic autonomy increasingly drive investment decisions. Companies and governments want to reduce dependencies, diversify suppliers, secure critical inputs, and gain control over key points in value chains.
These goals carry substantial costs. Corporations will seek efficiencies, pass expenses to consumers, achieve greater scale, or enter new markets. Governments respond with subsidies, tariffs, trade restrictions, and tax incentives in a race for economic security.
Industrial policy and government intervention play an expanding role, raising concerns over the quality of state involvement. Duplicating production capacity and maintaining alternative suppliers requires investments that prove difficult to justify on economic returns alone, creating risks of both overinvestment and underinvestment.