The warning was delivered by Petya Koeva Brooks, the IMF’s Deputy Director of Research, during the organisation’s Annual Meetings in Bangkok, Thailand, on Tuesday, October 13, 2026. Koeva Brooks said low-income countries that depend heavily on imported oil were among the most vulnerable to rising energy prices, particularly those already struggling with high debt levels and persistent inflation.

She explained that years of economic disruptions had weakened many governments’ ability to protect their citizens from rising living costs, leaving them with difficult choices over public spending and financial support.

The energy shock has also affected other essential commodities, including food and fertiliser, raising concerns about further increases in the cost of living and pressure on agricultural production.

According to the IMF official, the situation is particularly difficult for poorer households because energy and food account for a substantial share of their spending. Governments in these countries therefore face increasing pressure to provide relief even as their financial resources become more limited.

The IMF has advised governments to use narrowly targeted subsidies to support the most vulnerable households rather than introduce broad measures that could place additional strain on public finances. It has also urged countries to rebuild their financial reserves and adopt policies to manage rising debt.

Koeva Brooks said countries unable to maintain sustainable debt levels should consider restructuring rather than delaying action until their financial difficulties become more severe.

She argued that timely and orderly debt restructuring could help reduce the economic costs associated with waiting until a country’s debt burden becomes more difficult to manage.

The IMF’s latest World Economic Outlook, released on October 13, also highlighted widening differences in economic performance across countries. While the global economy has shown some resilience, the benefits have not been shared equally.

The Fund’s projections point to global growth of 3.1 per cent in 2026, supported partly by investment in artificial intelligence (AI), particularly in economies connected to technology supply chains.

Countries benefiting from increased demand for AI-related products and infrastructure are experiencing stronger economic activity than nations with limited exposure to the technology sector and greater vulnerability to energy price increases.

Koeva Brooks warned that a slowdown in AI investment could weaken global output, with consequences extending beyond advanced economies through international trade and supply-chain connections.

In a downside scenario in which AI fails to deliver the productivity improvements investors anticipate, global economic growth could be weaker than currently projected. Such a development would add another risk to an already uncertain outlook.

The IMF also identified climate-related pressures as a concern, particularly the potential effects of El Niño on food prices.

El Niño is a natural climate pattern involving warmer-than-average sea surface temperatures in the tropical Pacific Ocean. It can alter rainfall and temperature patterns across different regions, increasing the risk of droughts, floods and disruptions to agricultural production.

Koeva Brooks said some of the effects of climate-related pressures had already been reflected in higher prices for certain food and beverage products. However, she cautioned that the eventual impact could be greater than current estimates suggest.

The IMF’s warning underscores the difficult choices confronting governments already burdened by debt. For low-income countries dependent on imported energy, the challenge is to protect vulnerable citizens from rising prices while maintaining public services and avoiding a further deterioration in their finances.

Reporting by TalkNaijaMedia