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The report also underscores the importance of human capital and institutional preparedness. Expanding
digital literacy, strengthening education and workforce training, and developing practical regulatory
frameworks for data governance, cybersecurity, competition and consumer protection will be essential
to ensuring that AI adoption is both inclusive and secure. Regional cooperation can further help
developing economies overcome limitations arising from small domestic markets by facilitating common
digital standards, shared infrastructure and integrated technology ecosystems.

Encouragingly, investment in AI-related infrastructure has already begun to accelerate across several
African economies. Major international technology companies are investing in data centres, cloud
computing infrastructure and graphics processing capabilities, reflecting growing confidence in the
region's long-term digital potential. However, the IMF cautions that without broader improvements in
infrastructure and skills, the benefits of these investments could remain concentrated in a few countries,
widening rather than narrowing regional disparities.

The IMF concludes that the AI revolution presents a narrow but significant window of opportunity for
developing economies. Countries that invest early in reliable power supply, digital infrastructure, human
capital and sound governance frameworks will be better positioned to enhance productivity, attract
private investment and improve public services. Conversely, delayed action risks widening existing
productivity gaps and reducing competitiveness in an increasingly digital global economy.

3. Geopolitical shocks reshape economic prospects across regions - IMF

The economic consequences of geopolitical conflicts are increasingly becoming uneven across countries,
reflecting differences in energy dependence, trade structures, fiscal capacity and external financing needs.
According to the International Monetary Fund (IMF), the conflict in the Middle East has altered the
economic outlook across the Western Hemisphere, demonstrating how the same external shock can
generate markedly different outcomes depending on a country's economic structure. While higher
commodity prices have benefited several energy-exporting economies, energy-importing and tourism-
dependent countries continue to face rising inflation, tighter financial conditions and weaker economic
activity.

Oil-exporting economies, including Canada, the United States, Brazil, Colombia, Guyana, Ecuador,
Trinidad and Tobago, Argentina and Venezuela, are expected to benefit from higher oil prices through
stronger export earnings, improved current account balances and higher fiscal revenues. Although these
economies also face tighter financial conditions and higher domestic inflation, the positive effects of
improved terms of trade are expected to outweigh the adverse impacts in the short term. Nevertheless,
the IMF cautions that vulnerable households within these economies will continue to face rising fuel and
food prices despite the broader macroeconomic gains.

In contrast, tourism-dependent Caribbean economies are among the most vulnerable to the current
geopolitical environment. High dependence on imported energy, elevated public debt and limited fiscal
space have increased their exposure to higher oil prices and transportation costs. Similarly, several Central

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