AI boom bolstered growth in global trade, benefiting China and India, says IMF

The International Monetary Fund (IMF) has reported that the rapid growth of global trade between 2023 and 2025 was significantly boosted by a 29% surge in AI-related trade, which would have otherwise only resulted in a 4.6% growth rate. IMF's new chief economist, Silvana Tenreyro, highlighted that the demand for AI has propelled growth in China, India, and other Asian countries, surpassing the overall global trade growth.

Speaking at the IMF and World Bank's annual meetings in Bangkok, Tenreyro, a former professor at the London School of Economics, emphasized that AI-related investment and trade have been key drivers of global growth. However, Tenreyro also cautioned that AI supply chains are highly concentrated in a few countries and sectors, which could create potential chokepoints.

The IMF forecast assumes that the AI boom will eventually subside, but a prolonged AI boom could still lead to productivity gains, potentially limiting the inflationary impact. If the AI boom continues without productivity gains, the growth benefits would be smaller, and inflation would be higher. Moreover, a reassessment of AI's profitability could result in downward adjustments in demand, effectively unwinding the current AI boom.