The artificial intelligence investment boom is helping sustain global economic growth at around 3%, with Asia among the biggest beneficiaries, but the technology could trigger sweeping changes to employment, taxation and education as businesses increasingly automate tasks, International Monetary Fund Managing Director Kristalina Georgieva warned on Monday.
Speaking at the opening of the IMF and World Bank’s weeklong meetings in Bangkok, Georgieva described AI as a powerful source of investment and demand that is helping offset the drag from an energy supply shock. However, she cautioned that the economic benefits could come alongside a prolonged disruption to labor markets, with governments facing difficult questions about how workers will adapt and how public finances will be sustained if income shifts from labor to capital.
The IMF estimates that AI could affect approximately 40% of jobs globally through augmentation, downgrading or elimination, with the share rising to as much as 60% in advanced economies.
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“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 attending the meetings.
The warning captures the dual nature of the AI boom. Heavy spending on computing infrastructure, semiconductors and data centers is supporting economic activity today, while the technology’s longer-term effects could reshape the distribution of jobs, wages and investment returns. The challenge for policymakers is to capture the productivity gains without allowing the benefits to become concentrated among a relatively narrow group of companies, investors and highly skilled workers.
The IMF forecast global growth of 3% in 2026 in July and was due to publish an updated economic outlook on Tuesday.
AI Investment Gives Asia A Growth Boost
Georgieva said the AI boom was already producing a “demand shock” and an “investment shock”, with the potential to lift growth in advanced Asian economies by between 0.5 and 1 percentage point and in emerging Asian economies by 0.2 to 0.8 percentage point.
The gains reflect the scale of spending required to build the infrastructure underpinning AI development and deployment. Data centers, advanced chips, memory, networking equipment and electricity infrastructure have become essential components of the technology supply chain, creating opportunities for economies that manufacture the hardware or provide the supporting services.
The United States, China and India are among the most important producers in the AI supply chain, Georgieva said, while many companies supplying the hardware required for the infrastructure are based elsewhere in Asia, including Thailand, the host of this year’s annual meetings. That supply-chain position gives Asian economies an opportunity to benefit from AI investment even when they are not leading the development of the largest models. Manufacturing components, supplying equipment and supporting infrastructure construction can generate demand for industrial production, employment and investment.
However, the gains are unlikely to be distributed evenly. Economies with established manufacturing capacity, reliable electricity, skilled workers and the ability to attract investment may capture a larger share of the expansion. Countries that lack these advantages risk benefiting less from the infrastructure boom, even as AI changes the way their businesses and workers operate.
The immediate growth contribution also does not necessarily guarantee lasting productivity gains. Infrastructure spending boosts demand while projects are being built, but the longer-term economic payoff depends on whether companies use AI to improve output, reduce costs, and develop commercially valuable products and services.
For emerging Asian economies, the challenge is therefore to move beyond supplying hardware and find practical applications that raise productivity across domestic industries. That requires investment in skills, digital infrastructure and systems that enable businesses to adopt the technology.
Georgieva’s description of AI as a “slow-moving tsunami” points to the importance of preparing for these changes before the effects become more difficult to manage.
“It is a transformative technology. It so completely changes how we work, how we live,” she said, describing how an AI assistant now provides her with a 30-second daily message about her schedule.
Labor Markets Face Disruption As Governments Prepare For Change
The potential effects on employment were a central concern at the meetings, with Georgieva warning that AI could reshape jobs well beyond the straightforward replacement of workers by machines.
The IMF’s estimate that around 40% of jobs globally could be augmented, downgraded, or eliminated encompasses several different outcomes. Some workers may become more productive by using AI tools, while others could see their responsibilities reduced or their positions disappear as employers automate tasks.
Advanced economies face an especially large potential exposure, with the IMF estimating that up to 60% of jobs could be affected. The impact will depend on the nature of the work, the speed of adoption, and whether employers use AI primarily to complement employees or replace particular functions.
An initial study cited by Georgieva found that 10% of jobs in the United States already required AI skills. At the same time, routine and repetitive jobs were shrinking, while employment in two lower-paying sectors, construction and data centers, was increasing.
That contrast shows that AI can redistribute employment rather than simply reduce the total number of jobs. Building and operating computing infrastructure creates demand for workers, while automation can weaken demand for some administrative and repetitive roles. Whether the transition produces a net employment gain will depend on how quickly new opportunities emerge relative to the jobs and tasks displaced.
The disruption could be particularly difficult for workers entering the labor market. Singapore President Tharman Shanmugaratnam, speaking at the same event, warned that employers were reducing demand for entry-level positions, including the first jobs available to 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.
Entry-level jobs often provide the initial experience through which graduates develop professional skills, build networks and progress into more senior roles. If AI reduces the number of junior positions, workers could face a more difficult transition from education into employment, potentially weakening the traditional pathways through which skills and experience accumulate.
Shanmugaratnam urged governments to ensure that AI creates good jobs and allows people to continue progressing through their careers rather than becoming trapped by automation.
“AI is going to widen the divergence if we are too passive about it,” he said, warning that the technology could increase differences in growth and job creation between advanced and developing economies.
But his comments highlight a wider concern: countries that adapt their education systems, labor policies and industries to AI may capture productivity gains more quickly, while those that respond slowly could face greater disruption and fewer opportunities for workers.
Tax Systems and Developing Economies Face A Different Challenge
The effects of AI extend beyond employment to government revenue. Georgieva warned that the technology could have profound consequences for taxation as economic activity shifts from labor towards capital.
Many tax systems rely heavily on income earned by workers and the payrolls of businesses. If AI adoption reduces labor demand in some sectors while increasing the share of income accruing to technology owners and investors, governments may need to reconsider whether existing tax structures can reliably fund public services.
The issue is not just about AI eliminating jobs. Even if workers remain employed, changes in wages, productivity, and the distribution of profits could alter the balance between labor income and capital returns. Governments may consequently face pressure to adjust taxation and social protection as the economic structure changes.
The transition also creates a risk that productivity gains will accrue disproportionately to companies that own AI systems and the infrastructure required to operate them. Without effective policies to support workers and broaden access to the technology, higher productivity could coexist with uneven wage growth and widening differences in economic opportunity.
World Bank President Ajay Banga offered a more differentiated view of the employment outlook, saying he was not convinced that AI would destroy entry-level jobs across the board. He argued that much of the disruption could occur in advanced economies developing large AI models.
“In the emerging markets, we are not into large language models,” Banga said.
The World Bank, he added, was focused on deploying “small AI” that does not require massive computing power but can improve productivity for farmers, health clinics and teachers.
This approach is expected to be embraced by developing economies, where limited access to expensive computing infrastructure may make the largest AI systems difficult to deploy at scale. Smaller, targeted applications could help improve agricultural decisions, support healthcare delivery and assist teachers without requiring countries to compete directly in the capital-intensive business of building frontier models.
The meetings, which are expected to draw about 18,000 participants, including finance officials from the IMF’s 191 member countries, come as governments confront the competing demands of supporting economic growth and preparing for technological disruption. Several finance ministers are expected to skip the gathering to focus on domestic priorities, including US Treasury Secretary Scott Bessent and Spanish Finance Minister Arcadi España.
However, the major policy concern is how to manage a technology that is already stimulating investment and supporting growth while potentially undermining established employment pathways and tax arrangements. While the infrastructure boom may sustain economic activity in the near term, its longer-term contribution is expected to hinge on the chances of productivity gains spread across industries and countries.
Georgieva’s warning is that governments cannot treat AI solely as an investment opportunity. They must also prepare workers, adapt education systems, and reconsider how public revenue is generated as the technology changes the relationship between labor, capital, and economic growth.