Heavily indebted, oil-importing countries are facing the worst of the energy shock from the Iran war, and many have “no choice” but to cut spending or potentially face debt restructuring, the IMF’s deputy director of research Petya Koeva Brooks has said, in an AFP interview carried by NewsFirst from the sidelines of the Fund’s Annual Meetings in Bangkok on Tuesday.
“Unfortunately, after years of the global economy being hit (by) shock after shock, debt levels have increased quite a lot, and at the same time, inflation has become a problem.”
The advice that matters most to a country that has already done it
The sharpest line is about timing. Koeva Brooks said “many” low-income countries were in debt distress or close to it, and that they should seek restructuring if they could not otherwise address the problem.
“Where debt is not sustainable, then resolving that debt and having orderly and timely restructuring is always better than waiting, because then the cost of restructuring down the road is going to be much higher.”
That is a statement about delay, and Sri Lanka is the country its own region’s peers now cite. The G24 Secretariat’s director Iyabo Masha described Sri Lanka’s prolonged debt crisis as a key reference point in reforming the global restructuring system at a briefing the same week, while noting that the architecture reforms she listed — a revised IMF Debt Sustainability Framework, a rewritten Global Sovereign Debt Roundtable playbook — came since Sri Lanka’s restructuring rather than in time for it.
Read together, the two briefings describe the same lesson from opposite ends: the Fund now advises vulnerable debtors to move early, and the reference case for what the system looked like without that option is Sri Lanka’s.
What the Fund is recommending instead of broad relief
The IMF has called on countries to offer narrow, targeted subsidies in response to the energy crisis, while also urging all governments to rebuild fiscal buffers and address rising debt after years of successive shocks.
Sri Lanka already runs on that model, and the Fund wrote it into the programme: the IMF’s own social spending floor is tied to Aswesuma, the targeted welfare scheme that replaced broader subsidies. Nothing in the filing refers to Sri Lanka, and the recommendation is addressed to vulnerable economies generally.
Koeva Brooks was explicit that the advice is not evenly costly.
“Our messages indeed apply to most countries, but again, the trade-offs and the choices that have to be made are much more difficult for the most vulnerable countries.”
The reason she gave is compositional: in the most vulnerable economies “the consumption basket is heavily weighted towards energy and food.” Her conclusion — “But unfortunately there is no other choice.”
Which countries the Fund means, precisely
The World Economic Outlook identifies the most vulnerable group as low-income developing countries that are net oil importers and are not exposed to the AI technology investment boom.
That is a three-part test, and Sri Lanka meets two parts of it. It is a net oil importer and it sits outside the AI investment boom, but it is not a low-income country — it is classified lower-middle-income. The Fund’s most-vulnerable category is not Sri Lanka’s, and the filing does not place Sri Lanka in it. What the October outlook did do for Sri Lanka specifically was raise its 2026 growth forecast to 4.0%, a 0.9-point upgrade on April.
The wire also records the crisis reaching beyond energy, into fertiliser supplies — a transmission channel with obvious relevance to an agricultural economy, though the filing gives no country detail.
Two filings from one newsroom, disagreeing on the headline number
The same day, NewsFirst also reported Managing Director Kristalina Georgieva on the global outlook, framing 2026 as a contest between the Middle East energy shock and an AI-driven boost. She put global growth at approximately 3.1% in 2026 — “unchanged from earlier forecasts”, and below the 3.4% recorded in 2025.
The AFP wire in the same newsroom on the same day says the Fund “raised its forecast” for 2026 global growth.
Both are defensible, and which one is true depends entirely on the comparison period:
| Edition | Global growth, 2026 |
|---|---|
| January 2026 | 3.3% |
| April 2026 | 3.1% |
| July 2026 | 3.0% |
| October 2026 | 3.1% |
Against July, 3.1% is an increase of 0.1 points — “raised”. Against April, it is identical — “unchanged”. This desk noted on 13 October that every outlet had adopted the one-edition window that makes the figure look like an upgrade, and that none had observed the round trip. The Managing Director’s own characterisation is the longer-window one.
The recovery that returns to where it started
Georgieva’s 2025 figure supplies a comparison the Fund’s own forecasts had left incomplete. Global growth was 3.4% in 2025, is projected at 3.1% in 2026, and is forecast to recover to 3.4% in 2027 — the figure given when the outlook was released.
So the 2027 “recovery” returns global growth precisely to its 2025 level. On the Fund’s current numbers the war-and-AI period nets out to a two-year dip and a return to the starting point, not a gain. No filing in either edition makes the comparison.
Who is winning
Georgieva’s account of the distribution is consistent with the outlook. Economies inside the AI supply chain are benefiting, and she named Thailand, Malaysia, South Korea and Singapore. Energy exporters that have avoided direct exposure to the conflict are also doing relatively well. Low-income countries, fragile states and conflict-affected economies face the greatest difficulty, as do energy importers excluded from the technology boom.
Not reported
Neither filing quantifies anything about the vulnerable group: how many countries are in it, how many are in debt distress as against close to it, or how much spending the Fund thinks they need to cut. “Many” is the only measure given.
Neither names a single country as a candidate for restructuring, and neither says which countries the Fund has actually advised to restructure or on what timetable. Koeva Brooks’s point that waiting raises the eventual cost is made without a figure, an example or a mechanism.
Georgieva’s remarks carry no venue, date or occasion in the filing — only the subject — and no indication of whether she was speaking at the Annual Meetings alongside the outlook’s release. Neither filing gives Sri Lanka’s position, and neither addresses what the Fund’s advice means for a country whose Extended Fund Facility concludes in March 2027 and which is in talks on a successor programme.
A note on sourcing
Both sources are NewsFirst filings, which count as one newsroom for this article’s source rating. One is an AFP wire; the other is NewsFirst’s own write-up. A search of the other verified outlets — EconomyNext, Daily FT, Island, Sunday Times, Daily Mirror, Lanka Business Online, Colombo Gazette and Hiru — found no independent report of Koeva Brooks’s remarks, so the AFP interview appears not to have been picked up elsewhere in Sri Lanka. The underlying World Economic Outlook is separately covered from five newsrooms in our 13 October report.
Sources: NewsFirst — AFP interview, NewsFirst — Georgieva.
