IMF Warns AI Disruption to Reshape 40% of Global Jobs, With Youth Facing Earliest Impact

Artificial intelligence investment is sustaining global economic growth near 3% annually despite persistent energy-price shocks, IMF Managing Director Kristalina Georgieva said Monday at the Fund’s annual meetings in Bangkok.

Speaking on the opening day of the gatherings, which run through October 18, Georgieva identified Asian economies that manufacture AI hardware as the primary beneficiaries. Adoption of the technology could add 0.5 to 1 percentage point per year to growth in advanced economies and 0.2 to 0.8 points in emerging markets, she noted.

A full percentage-point boost would more than offset the demographic drag from aging populations across the region, Georgieva added. The IMF’s July outlook showed the top four net exporters of AI hardware—Taiwan, South Korea, Thailand, and Malaysia—exceeded first-quarter growth forecasts by an average of 4.4% on an annualized basis. South Korea expanded at a 7.5% pace versus the 1.8% projected in April.

In Singapore last week, Georgieva said AI hardware and related technology products now account for more than a tenth of global goods trade. She added that AI investment as a share of global GDP is on track to surpass the capital deployed to build railroads or the electricity grid.

Georgieva cautioned that the boom is largely bypassing nations outside the AI supply chain. The Fund’s July update projected 2026 global growth at 3%, down from 3.5% in 2025, as the Middle East conflict pushed energy prices higher.

On labor markets, Georgieva described AI as a “slow-moving tsunami” that will ultimately affect roughly 40% of jobs worldwide, downgrading or eliminating many of them. Exposure reaches about 60% in advanced economies and 23% in low-income countries, though the lower figure largely reflects limited AI penetration to date.

Young people entering the workforce face the earliest disruption, she said, because AI is automating the routine tasks that entry-level positions traditionally provide. Singapore President Tharman Shanmugaratnam, appearing on the same panel, said demand for graduates’ first jobs is already declining and warned that AI could widen the gap between rich and developing economies without government intervention.

AI could also strain public finances, Georgieva noted, since a shift of income from labor to capital owners would erode the payroll-tax base governments rely on most. World Bank President Ajay Banga said the institution is supporting “small AI” tools that do not depend on large language models, targeting farmers, clinics, and classrooms in emerging markets.

Georgieva also warned in Singapore that the AI build-out itself is contributing to inflationary pressure, and that disappointing earnings could ripple through markets because major AI companies have borrowed heavily to fund infrastructure.

The IMF will publish its full World Economic Outlook at 9 a.m. Bangkok time on October 13—10 p.m. Monday in New York—marking its first revision to the 3% global growth forecast since July.

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