Productivity gains from AI could help offset Asia's ageing population problem

Artificial intelligence could help offset Asia's shrinking workforce as some countries' populations ​age, provided its adoption is ‌scaled evenly across the region instead of deepening existing disparities, the International Monetary Fund said on Monday.

Speaking at the launch of an IMF book on challenges and opportunities in Asia, IMF Managing ​Director Kristalina Georgieva said ⁠demography, economic integration and technology, specifically AI, are the three big "transformations" facing the region.

"AI is projected to lift up growth in advanced Asia, ‌where the ageing populations are, somewhere between half a percentage and one percentage point... and what is amazing is that if the countries capture productivity and this growth, ⁠they will more than offset the demographic pressure," she said.

Findings presented in the book show that countries such as China, Japan and South Korea could lose nearly 25% of their working population between now and 2050, a loss that could ​be offset by productivity gains made from AI.

However, Krishna Srinivasan, director of the IMF's Asia and Pacific department, cautioned that ​policymakers ‌must balance the benefits from AI adoption against the risk of a widening divergence across countries in Asia.

"What matters is ​whether ⁠AI augments workers or automates jobs. Advanced economies, for sure, are more exposed, but they are also better placed ⁠to benefit. Emerging markets are less exposed, but also less in a position to capture the upside," Srinivasan said at the book launch, which was part of IMF and World ⁠Bank annual meetings in Bangkok.

"The good news here ​is reforms that raise skills and productivity can bring adoption forward by a decade or more."

Georgieva also said deeper regional trade agreements and a reduction in non-tariff barriers could ‌raise Asia's GDP ⁠by about 1.8% in the long ​run.