Developing economies have been urged to expand digital connectivity and strengthen fiscal discipline to withstand rising energy costs, climate-related disasters and mounting debt pressures while taking advantage of the global artificial intelligence (AI) boom.
The call came amid a challenging global economic outlook, with the International Monetary Fund’s latest World Economic Outlook projecting global growth at 3.1 per cent and global inflation at 4.7 per cent, according to figures presented in the report.
While the rapid expansion of AI and other technologies is supporting growth in technology-exporting economies, many developing countries, particularly climate-vulnerable nations, risk being left behind.
More than 60 per cent of low-income countries are in or near debt distress, intensifying calls for governments to balance fiscal consolidation with investments that can stimulate economic growth and protect vulnerable populations.
The issues featured prominently at the World Bank and IMF Annual Meetings in Bangkok, Thailand, where delegates discussed the economic challenges confronting developing nations and possible strategies for addressing them.
Wayne Henry, Chairman and Director General of the Planning Institute of Jamaica, said geopolitical tensions were contributing to higher oil and energy prices, creating inflationary pressures across economies.
He also highlighted the growing impact of climate-related disasters, particularly on developing countries with limited resources to respond to environmental shocks.
“We are in a challenging environment as we are here because of geopolitical matters that affect oil and energy prices and that would affect all countries’ transportation fuel. And so there are strong inflationary impulses,” Henry said.
He added that climate vulnerabilities and the increasing intensity of extreme weather events were placing additional pressure on developing countries.
Speaking from the perspective of the Caribbean, Henry said the region remained particularly vulnerable to climate-related risks.
Although the AI boom has improved growth prospects for countries involved in technology production and related supply chains, he said many developing economies had yet to benefit significantly from the trend.
According to him, countries that produce advanced technologies and participate in AI supply chains have recorded upward revisions to their growth prospects, while several developing economies continue to struggle to keep pace.
Henry called for greater investment in digital connectivity to enable developing countries to benefit more fully from technological advances.
He said improved access to digital infrastructure would help these economies participate more effectively in the expanding technology-driven global economy.
The discussions also underscored the need for governments to manage public debt responsibly while ensuring that fiscal adjustments do not disproportionately affect vulnerable citizens.
Fiscal consolidation, alongside the protection of essential social safety nets, was identified as an important part of addressing debt pressures, while investment in digital infrastructure could help create new economic opportunities.
For developing countries, the challenge is to pursue both priorities simultaneously: stabilising public finances while building the technological capacity needed to compete in an increasingly digital global economy.
