Investment in artificial intelligence infrastructure is helping sustain global economic growth at around 3%, with Asia among the main beneficiaries. But the International Monetary Fund (IMF) has warned that the same investment boom could disrupt labour markets, tax systems and education unless governments prepare for the changes ahead.
AI Investment Supports Global Growth
Speaking at the opening of the IMF and World Bank annual meetings in Bangkok, IMF Managing Director Kristalina Georgieva described AI as a powerful source of new demand and investment, helping offset the impact of the global energy supply shock. The technology could add 0.5 to 1 percentage point to growth in advanced Asian economies and 0.2 to 0.8 percentage points in emerging Asian economies.
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“AI, love it, hate it. It’s already here,” Georgieva said. “That shift into higher gear is what is keeping the world economy growing at around 3 per cent, despite the fact we are being dragged down by the energy supply shock.”
The IMF projected in July that global growth would reach 3% in 2026, with an updated forecast due on Tuesday.
Labour Market Disruption Could Be Significant
The IMF’s concern extends beyond economic output. Its research suggests that around 40% of jobs worldwide could be augmented, downgraded or eliminated by AI, rising to as much as 60% in advanced economies.
A shift from labour towards capital could also affect tax revenues, education priorities and governments’ ability to fund public services. In the United States, one IMF study found that 10% of jobs now require AI skills. Routine roles are declining, while lower-paying jobs are growing in sectors such as construction and data centres.
“It is a transformative technology. So it completely changes how we work, how we live,” Georgieva said, describing how an AI assistant now provides her with a 30-second summary of her daily schedule.
Asia Benefits From Its Role In The AI Supply Chain
The United States, China and India remain major players in AI production, while many companies manufacturing the hardware behind the technology are based in Asia. Georgieva highlighted Thailand, host of this year’s meetings, as part of the region’s broader position in the supply chain.
This gives Asia a strategic advantage: the region is not only adopting AI but also producing the hardware needed to support its expansion.
Entry-Level Jobs Face Growing Pressure
Singapore President Tharman Shanmugaratnam warned that AI is already affecting graduates’ access to their first jobs.
“There is a particular problem that we have to address very soon … and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand,” he said.
He also cautioned that AI could widen the gap between advanced and developing economies if governments fail to act.
“AI is going to widen the divergence if we are too passive about it,” he said, calling for policies that use the technology to create good jobs and help workers progress in their careers.
World Bank Focuses On Practical AI Applications
World Bank President Ajay Banga offered a more measured view of the threat to entry-level employment, arguing that the most severe disruption may be concentrated in advanced economies developing large-scale AI models.
“In the emerging markets, we are not into large language models,” he said, describing the bank’s focus on “small AI” tools that require less computing power but can improve productivity for farmers, health clinics and teachers.
For many developing economies, targeted applications may offer a more accessible route to AI adoption than costly frontier models, helping address practical needs while supporting productivity.
The discussions in Bangkok highlighted the growing challenge for policymakers: AI is already influencing economic growth, employment and industrial strategy. The task now is to capture its benefits while preparing workers and public institutions for the disruption ahead.
