The Bangkok consensus: 3.1% growth on AI, an energy drag, and climate in the toolkit

Growth holds, on AI

At this week's IMF annual plenary in Bangkok, the headline stayed steady: the IMF projects global growth at 3.1% for 2026. But the composition tells the story — growth is being driven by the AI boom while being held back by an energy shock. That two-handed framing is the consensus this year. m:…8466

IMF Managing Director Kristalina Georgieva also warned about high public debt and rising sovereign bond yields, and the plenary flagged AI's own risks — youth unemployment, financial instability, and especially cyber risk. World Bank President Ajay Banga, meanwhile, reported progress on project preparation and the mobilization of private capital. m:…8466

Europe's triple test

Bank of Finland Governor Olli Rehn set Europe a triple test: take more responsibility for its own security as the European pillar of NATO, reduce dependence on imported fossil fuels through investment in renewables and nuclear power, and implement the Draghi report's roadmap for boosting European productivity through market integration, reduced red tape, and innovation investment. m:…5319

Europe's inflation is above target, mainly because of energy, Rehn said — but there is currently no evidence of second-round inflation effects, a data point the rate-setters will lean on. The European Systemic Risk Board, he noted, identifies geopolitics, AI valuation risks, and public debt as the three primary risks to the European financial system. m:…5319

His fix for the financing side: the Savings and Investments Union should be completed without delay, to channel Europeans' substantial savings into productive investment. A well-designed common safe asset, he argued, would deepen liquidity, provide safe collateral, and lower the cost of capital. Rehn also noted European banks held up through recent shocks on solid supervision, sturdy capital buffers and swift policy action — and contrasted Europe with the Asia-Pacific, which he called the world's growth engine, pointing to the EU's free trade agreements with India and Australia concluded this year. m:…5319

Climate enters the toolkit

The most concrete shift came from Bank Indonesia. The bank treats climate change as a systemic risk to financial stability, splitting the threat into physical risks — natural disasters that can cut agricultural productivity — and transition risks such as policy changes like coal phase-outs. m:…5142

Bank Indonesia's toolkit is already live. It has run green loan-to-value and down-payment incentives since December 2019 — up to 100% LTV for green buildings and as low as 0% down payment for battery-based electric vehicles — plus the RPIM ratio, set by regulation PBI No.24/3/PBI/2022, and the KLM liquidity incentive, via PBI No.11 of 2023. m:…5142

It also built a smartphone-based Kalkulator Hijau (version 1.0) together with the Coordinating Ministry for Maritime Affairs and Investment, a tool for calculating and monitoring carbon emissions; version 2.0 extends the tool to Scope 1, 2, and 3 calculations. m:…5142

What the consensus means

Put together, the week in Bangkok sketched a central-banking agenda with three fronts: energy prices driving the inflation numbers, AI driving both the growth forecast and the valuation-risk warnings, and climate moving from conference topic to macroprudential instrument. This suggests the next round of policy frameworks will be judged on how they handle all three at once — not on any single mandate. m:…8466 m:…5142 m:…5319