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   IMF meetings: Middle East conflict and AI boom complicate central bank inflation fight

   At the IMF-World Bank annual meetings in Bangkok, Bank of Korea Governor Shin Hyun-song said South Korea sits at the intersection of two powerful forces — Middle East conflict and the AI boom — whose cost-push and demand-pull effects are worsening inflation. South Korea raised rates twice in July and August to 3%, its first back-to-back hikes since January 2023, while the Bank of Japan hiked in June and September, India began its first tightening cycle in more than three years, Australia raised rates four times and the Philippines lifted rates in August. A July Bank for International Settlements report said data center, semiconductor and related infrastructure spending has reached about 1% of GDP in the most affected economies, with AI driving both demand and supply and blurring the business-cycle signals central banks rely on. Moody's Analytics economist Stefan Angrick said rate hikes do little against supply-side shocks such as military conflict or commodity disruptions, though the AI boom has so far appeared relatively insensitive to rate moves, and the IMF says global public debt is near its highest level since the end of World War II.

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