IMF Says AI Spending Is Propping Up Global Economy Amid Energy Shocks

Artificial intelligence spending is currently acting as the primary engine keeping the global economy afloat, sustaining an overall growth rate of roughly 3% annually even as persistent energy shocks drag down performance across a majority of countries. This economic assessment was delivered on Monday by International Monetary Fund (IMF) Managing Director Kristalina Georgieva during her opening address in Bangkok for the joint annual meetings of the IMF and the World Bank.

Speaking at the start of the high-level gatherings, which are scheduled to run through October 18 in the Thai capital, Georgieva pointed to the profound macroeconomic divisions created by the ongoing technology boom. While much of the world grapples with subdued growth, the biggest economic winners are clearly the Asian nations that manufacture the physical hardware driving the artificial intelligence revolution. According to IMF projections, widespread AI adoption could add between 0.5 and 1 percentage point annually to economic growth in advanced economies, and between 0.2 and 0.8 points in emerging markets.

To put these figures into perspective, a percentage point represents the raw gap between two distinct growth rates. For an economy that would otherwise expand at 2%, gaining a full percentage point lifts its growth rate to 3%, representing a substantial acceleration in economic output. Georgieva noted that for the most successful nations in the tech supply chain, the high end of that projected growth range would more than offset the economic drag caused by aging populations across the region.

The tangible impact of this phenomenon was previously underscored in the IMF’s July economic outlook update. That report revealed that the top four net exporters of AI hardware—Taiwan, South Korea, Thailand, and Malaysia—outperformed the Fund’s initial first-quarter growth forecasts by an average of 4.4% on an annualized basis. Most notably, South Korea surged ahead with a remarkable 7.5% growth pace, far outstripping the 1.8% expansion rate that the IMF had originally projected back in April.

Expanding on these themes during a curtain-raiser speech in Singapore last week, Georgieva highlighted the staggering scale of the sector. She noted that AI hardware and related technological products now account for more than a tenth of total global goods trade. Furthermore, she suggested that the cumulative level of investment dedicated to artificial intelligence as a share of global Gross Domestic Product (GDP) is likely to surpass the historic capital investments that went into building out the world’s railroads or the foundational electricity grid.

However, this unprecedented boom comes with a stark downside, as Georgieva warned that the economic windfall is entirely bypassing the vast majority of countries that exist outside of this specialized supply chain. Compounding this uneven distribution of wealth, the IMF’s July update projected overall global growth for 2026 to moderate to 3%, down from 3.5% in 2025. This deceleration is largely attributed to the economic fallout from the war in the Middle East, which has driven energy prices upward and imposed a heavy toll on energy-importing nations.

Beyond macroeconomics, the rapid integration of artificial intelligence is also transforming labor markets, a shift Georgieva vividly described as a "slow-moving tsunami." The IMF expects AI to eventually touch approximately 40% of all jobs worldwide, a process that will involve downgrading or entirely eliminating many existing roles. Job exposure is calculated to run at roughly 60% in advanced economies, compared to about 23% in low-income countries. Georgieva explained that poorer nations register lower immediate exposure primarily because the technology has not yet deeply penetrated their local economies.

Young people entering the workforce for the first time find themselves directly in the path of this disruption, as artificial intelligence rapidly absorbs the routine, administrative tasks upon which entry-level employment has traditionally been built. Addressing the same panel, Singaporean President Tharman Shanmugaratnam echoed these concerns, noting that market demand for university graduates’ initial jobs is already visibly declining. He warned that if governments fail to take proactive policy measures, the AI revolution threatens to significantly widen the economic gap separating wealthy nations from developing economies.

The technological transition also poses systemic risks to public finances. Georgieva pointed out that if artificial intelligence succeeds in shifting national income away from wage-earning workers and toward the owners of capital, governments will inevitably lose a substantial portion of the labor-based tax revenues upon which they traditionally rely to fund public services. In response to these widening disparities, World Bank President Ajay Banga announced during the discussions that the bank is actively backing "small AI" tools. These alternative applications do not rely on resource-intensive large language models and are specifically designed to assist farmers, local medical clinics, and classrooms in emerging markets.

At the same time, the macroeconomic risks tied to the AI build-out extend into financial markets and inflationary pressures. Georgieva cautioned in her Singapore address that the massive infrastructure development required for artificial intelligence is actively contributing to global inflation. She also warned that if major AI corporations fail to deliver expected financial returns, disappointing corporate earnings could rapidly ripple through broader financial markets, especially given that many of these industry leaders have borrowed heavily to finance their aggressive expansion.

Market participants and economic analysts now await the official release of the IMF’s comprehensive World Economic Outlook report, scheduled for publication at 9:00 a.m. Bangkok time on October 13—corresponding to 10:00 p.m. Monday in New York. The forthcoming report will provide the first formal revision to the IMF’s global growth forecast since the July update, offering a clearer picture of how the artificial intelligence boom and ongoing energy shocks are reshaping the global financial landscape.