IMF Chief Says AI Investment Boom Is Propping Up Global Growth but Threatens a Labor-Market ‘Tsunami’

BANGKOK — Strong investment in AI infrastructure is keeping global growth at around 3%, with major benefits for Asia, but it also foreshadows a “slow-moving tsunami” that could massively disrupt labor markets, taxation and education, International Monetary Fund Managing Director Kristalina Georgieva said Monday.

Speaking on the first day of a weeklong set of IMF and World Bank meetings in the Thai capital, Georgieva said the artificial intelligence investment boom was already delivering a “demand shock, an investment shock” that could boost growth in advanced Asian economies by half a percentage point to a full point, and emerging Asian economies by 0.2 to 0.8 percentage point. “AI, love it, hate it. It’s already here,” she 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,” Georgieva told hundreds of participants. The IMF in July forecast global growth at 3% for 2026; it will release an updated outlook on Tuesday.

A summit shaped by absences

Some 18,000 people are expected to attend the gathering, including finance officials from the IMF’s 191 members. Several finance ministers are skipping the trip to focus on domestic priorities, including U.S. Treasury Secretary Scott Bessent and Spanish Finance Minister Arcadi España. The finance ministers from Canada, India and the Democratic Republic of Congo are also absent; the DRC is struggling to contain an Ebola outbreak that has killed at least 4,000 people, a source familiar with the plans said.

Saudi Finance Minister Mohammed Al-Jadaan, who heads the IMF’s steering committee, still planned to attend despite an operations halt at the Riyadh airport following deadly weekend attacks by Yemen’s Iran-aligned Houthis, two sources said.

Entry-level jobs in the crosshairs

Asked about AI’s negative impact on jobs, Georgieva said IMF research shows that some 40% of jobs will be either augmented, downgraded or eliminated by AI — and as many as 60% in advanced economies. The shift will have profound consequences for jobs, growth, education and even how governments generate revenue through taxation, given the expected shift from labor to capital, she said.

An initial study showed that 10% of jobs in the U.S. already required AI skills. While routine, repetitive jobs were shrinking, low-paying jobs were increasing in two lower-paying sectors, construction and data centers. Georgieva noted that the U.S., China and India are the most important producers in the AI supply chain, while many of the firms supplying hardware for the needed infrastructure are in Asia, including host country Thailand.

Singapore President Tharman Shanmugaratnam, speaking at the same event, said governments need to address how AI is 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 warned the world to guard against AI producing a “new divergence” in growth and job creation between developing and advanced economies.

World Bank President Ajay Banga, who has made jobs a central focus of his presidency, said he was not convinced entry-level jobs would be destroyed by AI, and that much of the disruption would occur in advanced economies building large AI models. “In the emerging markets, we are not into large language models,” he said, adding that the World Bank was focused on leveraging “small AI” that does not require massive computing power to deliver productivity gains for farmers, health clinics and teachers.

The warning comes as American voters are already uneasy about the technology: a Reuters/Ipsos poll found most voters say Trump and Congress are not taking AI risks seriously.

Reporting based on coverage by Reuters.