International Monetary Fund Managing Director Kristalina Georgieva said on October 12 that spending on artificial intelligence infrastructure is helping keep world economic growth near 3 percent, even as an energy shock continues to weigh on activity. Speaking on the opening day of the IMF and World Bank annual meetings in Bangkok, she described the current phase as both a demand shock and an investment shock that is already visible in advanced economies.

Georgieva identified the United States, China and India as the leading producers of AI technology. She noted that AI-related hardware and associated products now account for more than one-tenth of global goods trade. Investment in the sector as a share of global GDP is on track to match or exceed historical outlays on railroads, electricity grids and telecommunications networks.

Growth Outlook and Asian Gains

The IMF raised its 2026 global growth forecast to 3.1 percent from the 3 percent projected in July, citing strong AI-related investment that has partially offset damage from the Middle East conflict and trade tensions. The 2027 forecast remains at 3.4 percent. U.S. growth is projected at 2.3 percent in both years, supported by consumer spending, fiscal measures and technology investment.

Growth is becoming more concentrated. Thirty-two economies now account for 95 percent of global expansion, compared with 54 earlier in the year. Taiwan is expected to grow 10.7 percent this year and South Korea 3.3 percent, both lifted by semiconductor demand. In its July assessment the Fund found that the top four net exporters of AI hardware—Taiwan, South Korea, Thailand and Malaysia—had exceeded first-quarter forecasts by an average of 4.4 percent on an annualized basis.

Adoption of AI could add 0.5 to 1 percentage point a year to growth in advanced Asian economies and 0.2 to 0.8 percentage points in emerging Asia. Georgieva said the upper end of that range would more than offset the drag from aging populations. In an earlier speech in Singapore she estimated that successful implementation could lift annual global growth by as much as half a percentage point, generating extra output over a decade equivalent to the size of the ASEAN economy.

Labor Market Pressures Concentrate on Younger Workers

Georgieva warned that AI could eventually augment, downgrade or eliminate up to 40 percent of jobs worldwide. Exposure is estimated at roughly 60 percent in advanced economies and about 23 percent in low-income countries. She stressed that the lower figure for poorer nations largely reflects slower arrival of the technology rather than greater resilience.

Her principal concern is the effect on young people seeking entry-level positions built around routine and repetitive tasks. She called the labor-market impact a “slow-moving tsunami.” Singapore President Tharman Shanmugaratnam, speaking on the same panel, said demand for graduates’ first jobs is already declining and cautioned that uneven adaptation could widen gaps between rich and developing economies.

In advanced economies roughly one in ten job vacancies now requires at least one new skill, compared with about one in twenty in emerging markets. Demand for these skills is associated with higher wages and employment overall, yet it is also linked to greater polarization and particular challenges for younger workers.

Uneven Benefits and Policy Challenges

Economies outside the AI supply chain are largely missing the investment boom, raising the prospect of wider international inequality. The shift of income toward owners of capital could also erode the tax base that governments rely on most, Georgieva said.

The AI construction boom itself is adding to inflationary pressure. Large borrowing by hyperscalers and heavy global holdings of U.S. equities mean that disappointing earnings could transmit shocks more widely. Private bond issuance linked to AI projects is competing with governments for capital.

World Bank President Ajay Banga said the bank is supporting “small AI” tools that do not depend on large language models, targeting practical uses in farming, clinics and classrooms in emerging markets. These applications aim to deliver benefits without requiring the same scale of infrastructure.

The Fund’s full World Economic Outlook update was scheduled for release on October 13 in Bangkok, providing the first formal revision of the global growth path since July. Officials from 191 member countries are attending the meetings, which run through October 18.

Georgieva’s comments leave policymakers facing a dual challenge: capturing the productivity and growth gains from AI investment while preparing labor markets, tax systems and social supports for a prolonged transition that will fall most heavily on those just beginning their careers.