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

Artificial intelligence (AI) has been a major force in global economic growth, but its rapid expansion also brings risks, experts and policymakers warned this week at the IMF-World Bank Annual Meetings in Bangkok. Data centres and microchips drove AI spending, which helped offset the economic shock from rising energy prices due to the Middle East war, according to the International Monetary Fund (IMF).

IMF chief economist Silvana Tenreyro stated that global trade grew 8.3% from 2023 to 2025, a figure that would be closer to 4.6% without AI-related products. Bank of Canada governor Tiff Macklem echoed this sentiment, noting AI's presence in GDP, the stock market, and the bond market.

However, some top officials cautioned against over-reliance on AI investment. Federal Reserve Chair Kevin Warsh called AI the "most consequential change" to the global economy in his lifetime, predicting a "bumpy" road ahead due to uncertainties in technology understanding and market structures. IMF chief Kristalina Georgieva echoed the concern, warning that any slowdown in AI would have worldwide financial stability impacts. An IMF report projected a potential 0.4% global GDP reduction by 2028 if AI investment declined.

The IMF report also suggested that weaker or less durable AI investments and profitability could trigger market corrections. War and regulation pose additional threats to AI's future. Moody's Analytics warned that prolonged conflict could puncture the AI boom, while the uncertainty surrounding regulations has clouded its outlook. IMF chief Kristalina Georgieva emphasized that insufficient safeguards could lead to risks exceeding opportunities.