Artificial-intelligence investment is now a key engine of world-wide economic expansion, yet it also poses a sizable threat to employment, according to the International Monetary Fund.
AI as a growth catalyst
IMF Managing Director Kristalina Georgieva told delegates in Bangkok that the surge in AI-related spending is keeping the global economy on a roughly 3% growth trajectory, even as an ongoing energy shock weighs on many countries. She highlighted that the technology’s contribution could add between half a percentage point and a full point to annual growth in advanced economies and between two-tenth and eight-tenths of a point in emerging markets. The impact is especially pronounced in Asian nations that manufacture AI hardware – Taiwan, South Korea, Thailand and Malaysia – which have collectively outperformed the Fund’s earlier growth forecasts by more than four percentage points on an annualised basis.
Employment disruption and the youth effect
Georgieva described AI’s spread as a “slow-moving tsunami,” estimating that the technology will eventually touch about 40% of jobs worldwide. In high-income economies the exposure could reach 60%, while low-income countries see a lower figure, around 23%, largely because AI has not yet penetrated those markets. The most vulnerable group, she noted, are young people entering the labour force. Entry-level positions, often built around routine tasks, are the first to be automated or re-structured, leading to a decline in demand for recent graduates. This could widen income gaps between richer and poorer nations if policy responses are insufficient.
Regional dynamics and fiscal implications
The IMF’s analysis points to a growing divide: countries that supply AI hardware benefit from faster growth, whereas nations outside the supply chain risk being bypassed. The Fund also warned that a shift of income from workers to capital owners could erode tax bases, squeezing public finances. Moreover, the build-out of AI infrastructure is contributing to inflationary pressures. World Bank President Ajay Banga noted that the bank is supporting “small AI” solutions tailored to agriculture, health and education in developing regions, aiming to spread benefits more evenly.
Why it matters
The IMF’s outlook underscores a dual reality: AI is a powerful driver of economic performance, yet its adoption threatens to reshape a substantial share of the global workforce. Policymakers will need to balance encouraging AI-related investment with measures that protect vulnerable workers, especially young entrants, and ensure that growth gains are not confined to a narrow set of economies.
