Debt, AI boom and economic fragilities raise global risks, BIS says

A Union flag flutters from a pole atop the Bank of England, in the City of London on August 7, 2025. Niklas Halle'n | Afp | Getty Images Global pressures from rising public debt to financial fragilities and the sustainability of the AI boom are increasing risks, underscoring the need for disciplined policymaking, according to the Bank for International Settlements . The central bank umbrella group's Annual Economic Report published on Sunday warned of a complex mix of vulnerabilities, including strained fiscal positions, lingering supply shocks and the risk of a renewed bout of stubbornly high inflation. While economic activity has remained resilient in recent months, policymakers must act decisively, the BIS said, to preserve stability. "Policy actions must reinforce each other to avoid a pull and push on the global economy. Ultimately, success depends on sound fiscal and financial foundations," BIS General Manager Pablo Hernandez de Cos said. The report highlighted four key pressure points. Inflation has picked up again, with the BIS cautioning that more frequent supply disruptions could cause higher inflation expectations to become entrenched among households and businesses. "The readiness to act if the central banks observe that there is the anchoring of inflation expectations is the main message that we want to set," de Cos told reporters. …