AI investment keeps global growth at 3%, as IMF warns of a ‘Tsunami’ in labour market

Massive investment in artificial intelligence (AI) infrastructure is helping sustain global economic growth at around 3%, with Asian economies also benefiting from the spending boom. But the rapid expansion of AI is raising concerns about major changes to employment, taxation and education. International Monetary Fund (IMF) Managing Director Kristalina Georgieva has described the looming transformation as a “tsunami” slowly moving towards the world.

Speaking to several hundred participants on the opening day of the week-long annual meetings of the IMF and World Bank in Bangkok, the Thai capital, Georgieva said AI had already become part of everyday life, whether people liked it or not. Around 18,000 people are expected to attend this year’s meetings, including financial officials from the IMF’s 191 member countries.

In July, the IMF forecast that the global economy would grow by 3% in 2026. The organisation is scheduled to update its projections on Tuesday. However, several finance ministers are skipping this year’s meetings, including US Treasury Secretary Scott Bessent and Spain’s economy minister, Arcadi España, who are focusing on domestic priorities.

At Monday’s meeting, Georgieva said investment in AI was boosting both economic demand and capital spending. It could raise growth in Asia’s advanced economies by between 0.5 and 1 percentage point, while emerging Asian economies could see an increase of between 0.2 and 0.8 percentage points. She also warned that disruptions to energy supplies were putting pressure on the global economy.

Asked about the potential impact of AI on employment, Georgieva said IMF research suggested that the nature of work or the way jobs are performed could change in around 40% of jobs worldwide. Some jobs could deteriorate in quality, while others could disappear altogether. In advanced economies, around 60% of jobs could be affected by AI.

The consequences could extend beyond the labour market to economic growth, education systems and the way governments collect revenue. As AI adoption expands, capital could become more important relative to labour, increasing reliance on investment in technology and machinery rather than human work.

A preliminary study has found that AI-related skills are already required in around 10% of jobs in the United States. At the same time, opportunities in routine and repetitive work are declining, while employment is growing in sectors such as construction and data centres. Many jobs in these expanding sectors, however, offer relatively low wages.

Georgieva said AI was a technology transforming almost every aspect of life, from how people work to how they live. Recalling her own experience, she said her AI assistant now provides a 30-second briefing on her daily schedule.

She identified the United States, China and India as major producers in the AI technology supply chain. However, many companies supplying the equipment needed to build AI infrastructure are based in Asia. She highlighted this point while referring to Thailand, this year’s host of the annual meetings.

Singapore President Tharman Shanmugaratnam also voiced concern about AI’s impact. Speaking at the same event, he said governments should pay close attention to shrinking job opportunities for recent university graduates. Securing a first job after graduation, he said, was becoming an increasingly difficult challenge, with fewer opportunities available than before.

Tharman warned that AI could widen the gap between advanced and developing economies in both economic growth and job creation. Governments must not remain passive in the face of the technological shift, he said, or the divide could grow further. Instead, they should use AI to create new and better jobs, particularly in areas where people can apply their skills effectively.

The World Bank, meanwhile, sees a different set of opportunities for developing countries. Its president, Ajay Banga, said the most significant changes brought by AI were likely to occur in advanced economies, where large-scale AI models are being developed. Emerging markets, by contrast, are less involved in building such large models.

Banga said the World Bank was focusing less on developing large AI models and more on expanding the use of smaller-scale technologies. These require less computing power and can therefore be deployed more easily across different sectors. The bank aims to use such tools to improve productivity among farmers, healthcare facilities and teachers.

Overall, investment in AI infrastructure is helping support global economic growth, but questions remain over whether its benefits will be shared equally. While the technology is opening up new possibilities, it is also reshaping jobs and threatening to narrow employment opportunities for young people entering the workforce. Governments will therefore need to focus not only on harnessing AI’s potential but also on creating jobs, developing skills and helping workers adapt to technological change.