Leaders weigh ‘huge benefit’, risks of AI for global economy

Leaders are weighing both the potential benefits and risks of artificial intelligence (AI) for the global economy, according to reports from the IMF-World Bank Annual Meetings in Bangkok.

The International Monetary Fund (IMF) reported that global trade surged by 8.3% between 2023 and 2025, a figure that would likely be closer to 4.6% without AI-related products, according to IMF Chief Economist Silvana Tenreyro. AI has also been a key driver of global growth, propelled by investments in data centres and microchips, according to the IMF.

Bank of Canada Governor Tiff Macklem echoed these sentiments, stating that AI is "everywhere in the global economy" and evident in GDP, stock market performance, and bond market trends. While acknowledging the significant benefits of AI, Macklem also cautioned against over-reliance, predicting a "bumpy" road ahead in understanding the technology and the market structure of new AI technologies.

IMF Chief Kristalina Georgieva echoed the positive impact of AI on global growth but warned of potential risks if the industry were to experience a slowdown. She cautioned that a decline in AI investment could reverberate worldwide, with any loss of confidence leading to financial stability risks. IMF projections suggest that a decline in AI investment could reduce global GDP by 0.4% by 2028.

While AI investment and trade have helped mitigate the economic impact of the Middle East war, economists at Moody's Analytics warn that prolonged conflict could puncture the AI boom. Higher energy prices, tighter financial conditions, and increased operating costs could negatively impact AI profitability, according to the group.

Regulatory uncertainty also looms over AI's future. Some leaders, such as US President Donald Trump, advocate for limited government regulation, while others call for legislation to mitigate potential risks. IMF Chief Kristalina Georgieva emphasized the importance of safeguards in AI development, stating that without them, the risks might outweigh the opportunities.