AI Spending Keeps Global Economy Afloat Amid Energy Pressures, IMF Chief Says

BANGKOK — Massive, ongoing investments in artificial intelligence are currently serving as a primary engine of the global economy, helping to sustain roughly 3% annual growth even as persistent energy shocks weigh down a majority of countries.

That assessment was delivered by International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Monday, speaking on the opening day of the joint IMF and World Bank annual meetings in the Thai capital. The high-stakes summit, which brings together global finance ministers, central bankers, and economic leaders, runs through October 18.

According to Georgieva, the most significant economic beneficiaries of this technological wave are the Asian economies specializing in the hardware required to build out modern AI infrastructure. The IMF projects that robust AI adoption could add between 0.5 and 1 percentage point annually to economic growth in advanced economies, while contributing an estimated 0.2 to 0.8 percentage points to growth in emerging markets.

To put these figures into perspective, a percentage point represents the raw gap between two different growth rates. An economy expanding at a modest 2% that suddenly gains a full percentage point surges to 3%, a substantial macroeconomic leap. Georgieva noted that performance at the upper end of these projected ranges would be more than enough to offset the economic drag caused by aging populations across various regions.

The tangible impact of this hardware boom is already visible in official data. In its July outlook update, the IMF revealed that the top four net exporters of AI hardware—Taiwan, South Korea, Thailand, and Malaysia—significantly outperformed expectations. These nations beat their first-quarter growth forecasts by an average of 4.4% on an annualized basis. South Korea stood out dramatically, posting a remarkable 7.5% growth pace, far eclipsing the 1.8% projection the Fund had laid out in April.

Building on these themes during a curtain-raiser speech in Singapore last week, Georgieva pointed out that AI hardware and related technological products now account for more than one-tenth of total global goods trade. She further emphasized that cumulative AI investment as a share of global Gross Domestic Product (GDP) is on a trajectory that will likely surpass the historic capital outlays dedicated to building the world’s railways or the modern electricity grid.

Despite these extraordinary gains, the IMF chief offered a stark warning: the unprecedented boom is largely bypassing nations that sit outside the core technology supply chain. Driven heavily by the economic fallout and rising energy prices stemming from the ongoing war in the Middle East, the Fund’s July update projected global growth for 2026 at a moderated 3%, down from 3.5% in 2025.

Navigating the Labor Market Disruption

When turning to the future of employment, Georgieva characterized artificial intelligence as a "slow-moving tsunami." The IMF anticipates that the technology will eventually touch roughly 40% of jobs worldwide, downgrading, transforming, or altogether eliminating many traditional roles. Labor market exposure to AI is estimated to run around 60% in advanced economies, compared to roughly 23% in low-income countries. However, Georgieva explained that poorer nations score lower on this exposure index primarily because advanced AI infrastructure has not yet penetrated their domestic markets.

Young people entering the workforce for the first time find themselves directly in the line of fire, as AI rapidly absorbs the routine administrative and procedural tasks upon which entry-level positions are traditionally built.

Participating on the same panel in Bangkok, Singapore President Tharman Shanmugaratnam echoed these concerns. He noted that market demand for university graduates’ initial jobs is already showing signs of contraction and warned that artificial intelligence could drastically widen the economic divide between wealthy nations and developing economies if proactive government policies are not implemented swiftly.

Furthermore, Georgieva cautioned that the widespread integration of AI could create severe pressures on public finances. If the technology successfully shifts a significant portion of national income away from human labor and toward the owners of capital, governments risk losing a major portion of the traditional tax base upon which they heavily rely to fund public services.

Addressing the perspective of developing regions, World Bank President Ajay Banga announced that the institution is actively backing "small AI" tools. Unlike resource-heavy systems, these targeted tools do not depend on massive large language models and are specifically designed to assist farmers, local medical clinics, and classrooms in emerging markets.

Financial Risks and Inflationary Pressures

The rapid expansion of artificial intelligence is not without broader macroeconomic risks. Georgieva warned in Singapore that the massive infrastructure build-up required for AI is actively contributing to persistent inflationary pressures. She also cautioned that if anticipated corporate earnings fall short of lofty market expectations, financial contagion could spread swiftly through global markets, given that major AI companies have borrowed heavily to finance their expansive hardware purchases.

Financial markets and policymakers worldwide are now awaiting the release of the IMF’s comprehensive World Economic Outlook. The report is scheduled to be published at 9 a.m. Bangkok time on October 13—corresponding to 10 p.m. Monday in New York—and will deliver the Fund’s first official revision to its 3% global growth forecast since July.