IMF says AI investment keeps global growth around 3%

IMF chief Kristalina Georgieva called AI a 'slow-moving tsunami' that could reshape jobs, growth, education and tax revenues as economies shift from labour to capital. (EPA Images pic) BANGKOK: Strong investment in AI infrastructure is keeping global growth at around 3%, yielding major benefits for many Asian economies that supply the hardware, such as Thailand, International Monetary Fund managing director Kristalina Georgieva said on Monday.

The artificial intelligence investment boom was already delivering a "demand shock, an investment shock" that could boost growth in advanced Asian economies by a half to one full percentage point, and emerging Asian economies by 0.2 to 0.8 percentage point, she said.

"AI, love it, hate it. It's already here," Georgieva said.

"That shift into higher gear is what is keeping the world economy growing at around 3%, despite the fact we are being dragged down by the energy supply shock," she told hundreds of participants on the first day of a weeklong set of meetings of the IMF and World Bank in the Thai capital.

The IMF in July forecast global growth at 3% in 2026. It will release an updated outlook on Tuesday.

Some 18,000 people are expected to attend the meetings this week, including finance officials from the IMF's 191 members. Several ministers will skip the meeting to focus on domestic priorities, including US treasury secretary Scott Bessent and Spanish finance minister Arcadi España, sources familiar with the matter said.

AI will have profound consequences

Georgieva said AI amounted to a "slow-moving tsunami" that would have profound consequences for jobs, growth, education and even how governments generate revenue through taxation, given the expected shift from labor to capital.

The IMF estimates that AI could lead to 40% of jobs being augmented, downgraded or eliminated, over time, she said. An initial study showed that 10% of jobs in the US already required AI skills. While routine, repetitive jobs were shrinking, low-paying jobs were increasing in two lower-paying sectors, construction and data centers.

"It is a transformative technology. It so completely changes how we work, how we live," she said, noting that an AI assistant now gave her a 30-second message about her schedule each day.

The US, China and India are the most important producers in the AI supply chain, but many of the firms building the needed infrastructure are in Asia, Georgieva said, referencing Thailand, host of this year's annual meetings.

AI impact on entry-level jobs

World Bank president Ajay Banga, who has made jobs a central focus of his presidency, said the development bank was focused on leveraging "small AI", which is not dependent on large language models, to generate enormous productivity gains for farmers, healthcare systems, educators and others in emerging markets.

Singapore's president Tharman Shanmugaratnam, speaking at the same event, said governments should address how AI was reducing job opportunities for graduates.

"There is a particular problem that we have to address very soon ... and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand," he said.

He said the world should also guard against AI resulting in a "new divergence" in growth and job creation between developing and advanced economies.

"AI is going to widen the divergence if we are too passive about it," he said. "So we've got to do everything we can to first use AI to create good jobs and to create jobs that can be done well by human beings, can allow them to ride up a career ladder despite AI."