AI investment keeps global growth around 3%, with major Asia benefits: IMF

The International Monetary Fund's Managing Director, Kristalina Georgieva, stated on Monday that AI investment is sustaining global growth at approximately 3 percent, with considerable advantages for Asian economies that provide the hardware. She explained that the surge in AI investment is generating demand and investment shocks that could boost growth in advanced Asian economies by 0.5 to 1 percentage point, and emerging Asian economies by 0.2 to 0.8 percentage point.

Georgieva emphasized that artificial intelligence is an unavoidable reality and is already having a significant impact. She highlighted that the AI-driven transformation is affecting various aspects of life, from jobs to education, and even government revenue generation through taxation. The IMF projects that AI could impact 40 percent of jobs, either augmenting, downgrading, or eliminating them over time.

She noted that while routine, repetitive jobs are shrinking, low-paying jobs are increasing in sectors like construction and data centers. World Bank President Ajay Banga emphasized the importance of leveraging "small AI" to generate significant productivity gains in emerging markets, particularly in agriculture, healthcare, and education.

Both organizations called for proactive measures to address the potential challenges posed by AI, such as job displacement and a widening gap in growth and job creation between developing and advanced economies.