AI Will Hit 40% of Jobs, IMF Warns. Young People Are First in Line

Speaking on the opening day of the IMF and World Bank annual meetings in Bangkok, which are scheduled to run through October 18, Georgieva highlighted how the technology boom is reshaping the global financial landscape. According to the International Monetary Fund, the primary beneficiaries of this sweeping technological wave are the Asian economies that manufacture and supply the physical hardware powering modern AI systems. In these regions, widespread AI adoption and hardware production could ultimately add between 0.5 and 1 percentage point annually to growth in advanced economies, and between 0.2 and 0.8 points in emerging markets.

To put this in perspective, a percentage point represents the direct mathematical gap between two distinct growth rates. An economy expanding at 2% that picks up a full percentage point will grow at 3%, which represents a substantial economic boost. Georgieva noted that achieving growth at the higher end of this projected range would more than sufficiently offset the ongoing economic drag caused by aging populations across various regions.

Data from the IMF’s July outlook update underscores this phenomenon. The findings revealed that the top four net exporters of AI hardware—Taiwan, South Korea, Thailand, and Malaysia—significantly outperformed their first-quarter growth forecasts by an impressive average of 4.4% on an annualized basis. South Korea stood out in particular, expanding at a remarkable 7.5% pace compared to the modest 1.8% projection the Fund had previously outlined in April.

Building upon these figures during a speech delivered in Singapore last week, Georgieva pointed out that AI hardware and related technological products now account for more than 10% of total global goods trade. Furthermore, she emphasized that capital investments dedicated to AI as a share of global gross domestic product are widely expected to surpass the historical capital outlays that went into building out the world’s original railroad networks or electrical power grids.

Despite these extraordinary gains in specific sectors, Georgieva issued a stark warning that the current economic boom is bypassing the vast majority of countries that exist outside of this specialized supply chain. The IMF’s July update projected overall global economic growth for 2026 at 3%, a noticeable decline from the 3.5% recorded in 2025, largely driven by surging energy prices resulting from ongoing conflicts in the Middle East.

When addressing the labor market implications of the technology, Georgieva described artificial intelligence as a "slow-moving tsunami." The IMF anticipates that AI will eventually impact approximately 40% of all jobs worldwide, potentially downgrading or entirely eliminating numerous positions. Labor market exposure to AI is estimated at roughly 60% in advanced economies, compared to about 23% in low-income countries. However, Georgieva explained that poorer nations register lower exposure scores primarily because the technology has not yet deeply penetrated their local economies.

Young people entering the professional workforce are currently first in line to feel this disruption, as AI systems increasingly absorb the routine administrative tasks upon which entry-level jobs have traditionally been built. Speaking alongside Georgieva on the same panel, Singaporean President Tharman Shanmugaratnam warned that market demand for recent graduates’ entry-level positions is already declining. He cautioned that if governments fail to take decisive policy action, AI could significantly widen the economic divide between wealthy nations and the developing world.

Beyond labor market disruptions, Georgieva cautioned that the artificial intelligence boom could place considerable pressure on public finances. If the technology successfully shifts a substantial portion of income away from traditional laborers and toward the owners of capital, governments risk losing a major share of the tax base upon which they historically rely to fund public services.

Addressing alternative applications of the technology during the discussions, World Bank President Ajay Banga stated that the institution is actively backing "small AI" tools. These localized solutions do not depend on massive, resource-intensive large language models and are specifically tailored to assist farmers, local medical clinics, and classrooms across emerging markets.

Georgieva also reiterated warnings made in Singapore that the massive infrastructure build-up required for AI is actively contributing to inflationary pressures. She cautioned that any unexpected disappointments in corporate earnings could quickly ripple through wider financial markets, particularly because major artificial intelligence firms have taken on substantial debt to finance their rapid expansion.

The International Monetary Fund is set to publish its comprehensive World Economic Outlook report at 9:00 a.m. Bangkok time on October 13, corresponding to 10:00 p.m. Monday in New York. This upcoming publication will feature the Fund’s first official revision to its 3% global growth forecast since the previous update issued in July.