IMF flags job disruption and Asia’s gains as AI investment props up global growth

Artificial intelligence (AI) infrastructure investment is helping sustain global economic growth at around 3%, despite an energy supply shock, with Asian economies expected to benefit from rising demand for semiconductors, hardware and related infrastructure, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on October 12.

Speaking at the IMF and World Bank annual meetings in Bangkok, Georgieva said the AI investment boom could lift growth in advanced Asian economies by 0.5 to one percentage point, while emerging Asian economies could see gains of 0.2 to 0.8 percentage points.

The investment surge is benefiting economies involved in the AI supply chain, including Thailand, as companies expand the infrastructure needed to support AI deployment. The IMF had forecast global growth of 3% for 2026 in July and was due to release an updated outlook on October 13.

AI could affect 40% of jobs

Georgieva warned that AI would have far-reaching implications for employment, education, economic growth and government tax revenues as economic activity shifts from labour towards capital.

The IMF estimates that AI could augment, downgrade or eliminate 40% of jobs over time. Georgieva also noted that routine and repetitive roles were shrinking, while employment was increasing in lower-paying sectors such as construction and data centres.

The shift is already influencing hiring requirements. An initial study cited by Georgieva found that 10% of jobs in the US already required AI skills, highlighting the growing importance of technology capabilities in the labour market.

World Bank flags AI opportunities in emerging markets

World Bank President Ajay Banga said the development bank was exploring how smaller AI applications, which do not depend on large language models, could improve productivity in agriculture, healthcare and education across emerging markets.

The approach could help developing economies use AI to address practical challenges and improve service delivery without relying exclusively on large-scale AI infrastructure.

However, Singapore President Tharman Shanmugaratnam cautioned that AI could widen the economic divide between advanced and developing economies if governments failed to act. He also highlighted declining demand for entry-level graduate jobs as an emerging concern.

Tharman called for efforts to ensure AI creates quality employment opportunities and allows workers to progress in their careers, warning that governments must address the impact on young people entering the workforce.

As AI investment accelerates, the challenge for policymakers and employers will be to translate productivity gains into sustainable growth and employment while preparing workers for changing skills requirements.