IMF boss gases up economic, job changes from AI

Strong investment in artificial intelligence (AI) infrastructure is keeping global growth at about 3 percent, yielding major benefits for many Asian economies that supply the hardware, such as Thailand, IMF managing director Kristalina Georgieva said yesterday.

The AI 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.

IMF managing director Kristalina Georgieva attends a panel at this year’s annual IMF meetings in Bangkok yesterday.

Photo: EPA

“That shift into higher gear is what is keeping the world economy growing at around 3 percent, 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 Bangkok.

The IMF in July forecast global growth at 3 percent for this year. It should release an update today.

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 percent of jobs being augmented, downgraded or eliminated over time, she said. A study said that 10 percent 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, saying that an AI assistant gave her a 30 second message about her schedule each day.

Many of the firms building the needed infrastructure are in Asia, Georgieva said, speaking of Thailand, host of this year’s annual meetings.

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.

Singaporean President Tharman Shanmugaratnam, speaking at the same event, said governments should address how AI was reducing jobs 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 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.”