The Banking Executive Issue - October 2025 Issue

2025 IMF–World Bank Meetings The timing of the Washington meet- ings was extraordinary. The global economy had absorbed a new round of U.S. “reciprocal” tariffs and coun- termeasures—especially between Washington and Beijing—without tipping into recession. The IMF’s Oc- tober World Economic Outlook (WEO) upgraded 2025 growth to 3.2% (from 3.0% in July and 2.8% in April), with 3.1% projected for 2026. Yet the Fund stressed that this is still well below pre-pandemic norms, and that the medium-term growth outlook remains “subdued and un- even.” At the same time, an AI investment wave is reshaping trade, productivity and energy demand. IMF Managing Director Kristalina Georgieva under- scored that AI could add between 0.1 and 0.8 percentage points to global growth, but only for countries that are ready—those with robust digital infrastructure, skills, innova- tion ecosystems and credible regula- tion. The Fund’s new AI Preparedness Index ranks 174 coun- tries, with advanced economies and most Gulf states in the top third, and many low-income countries lagging far behind. Overlaying this is a geopolitical map in flux. Peace developments in Gaza and Syria have opened the door to reconstruction planning, even as wider regional tensions remain acute. World Bank Group President Ajay Banga spoke of expert groups already working on reconstruction frameworks for Gaza and Ukraine and stressed that “rebuilding what has been lost” must go hand in hand with preventing future conflict through jobs, inclusion and institu- tional resilience. For Arab delegations—from the Gulf to the Levant and Maghreb—the Washington meetings were about more than macro projections. They were an opportunity to assert a more confident regional voice on debt, cli- mate finance, digital transformation and the evolving architecture of global economic governance. ISSUE 202 OCTOBER 2025 the BANKING EXECUTIVE 43 1. SETTING THE SCENE: A CALM SURFACE, RESTLESS UNDERCURRENTS From a security-ringed IMF head- quarters on 19th Street to packed hotel ballrooms around DuPont Cir- cle, Washington, D.C. once again became the nerve center of global economic diplomacy as finance min- isters, central bank governors and de- velopment leaders gathered for the 2025 IMF–World Bank Group An- nual Meetings. Over six dense days, delegates wrestled with a deceptively calm global economy: growth hold- ing around 3%, but under pressure from record public debt, renewed trade tensions, accelerating climate shocks and an artificial-intelligence investment boom reshaping capital flows. For Arab policymakers and bankers, these meetings carried particular weight. The Middle East and North Africa (MENA) region is navigating an unusual mix of stronger near-term growth, post-conflict reconstruction needs in Gaza and Syria, and a once- in-a-generation energy and digital transition. In Washington, Arab min- isters and governors used their ex- panded platform to push for fairer representation in the Bretton Woods institutions, more nimble crisis and reconstruction tools, and greater em- phasis on jobs, human capital and private investment across the region. What emerged from a week of speeches, flagship reports, closed- door negotiations and corridor con- versations was a clear message: the world is coping better than many feared, but not nearly as well as it needs to—and the next two years will be decisive for how emerging markets, including in the Arab world, ride the cross-currents of trade re- alignment, AI-driven growth, climate finance and tightening fiscal con- straints.