Gita Gopinath

There's been a combination of things that have helped and some of it

have been surprises.

Again, since we're talking about debt, that increase in debt has come about because of the very large amount of support that governments around the world gave during each of these crises.

So during the pandemic, I mean, advanced economies spent about 25% of GDP.

if you look at the combination of not just outright support, but all kinds of loan guarantees and equity infusions and so on, that was huge.

Those were much higher levels than anything we'd seen

you know, in recent times.

And because of that, households and businesses came out of the pandemic with stronger balance sheets than they did going in.

And that has helped hold up demand also, and also has helped, therefore helps hold up profitability in a lot of businesses because of that strength that came from all that large amount of support.

That was one.

Second is the AI boom is a big player right now.

If we didn't have AI and if we didn't have the increase in demand coming from AI, we would be looking at just much lower growth rates in many parts of the world at this time.

And

We would also see trade being much weaker.

I mean, trade is being held up a lot by AI inputs flowing around.

That's also been a big contributor.

So we've had these positive offsetting events.

Now, the question is, what happens in the next crisis?

In the next crisis, countries do not have the fiscal space to provide that kind of support.

And we may see much less resilience than we've seen the last few years.