IMF warning: AI reshapes 40% of jobs, youth employment declines

According to Woofun AI, IMF Managing Director Kristalina Georgieva issued a dual warning at the Annual Meeting in Bangkok: while artificial intelligence is driving the economy, it will impact 40% of jobs, with young people being hit hardest.

Investment in artificial intelligence is offsetting the negative effects of ageing populations and is driving global economic growth at an annual rate of approximately 3%. Her remarks were made on the opening day of the Annual Meeting of the International Monetary Fund and the World Bank, which runs until 18 October. Georgieva highlighted that Asian economies are the biggest beneficiaries, and AI technology can boost annual GDP growth rates by 0.5 to 1 percentage point in developed economies and by 0.2 to 0.8 percentage point in emerging economies. For clarification, one percentage point refers to the difference in growth rate, meaning if the original growth rate was 2%, an increase of one percentage point would bring the actual rate to 3%.

This increase is enough to offset demographic pressures. According to data compiled by Woofun AI, a July report pointed out that the four major AI hardware net exporting economies — Taiwan (China), South Korea, Thailand, and Malaysia — all saw year-on-year growth rates exceeding Q1 forecasts by an average of 4.4%. South Korea, for instance, achieved a growth rate of 7.5%, far surpassing the April forecast of 1.8%. In a speech in Singapore, Georgieva noted that AI hardware and related products now account for more than one-tenth of global goods trade, and investment volume is expected to surpass that of railways or power grid construction.

However, the war in the Middle East has pushed up energy prices, and the July update to the report downgraded the global economic growth forecast for 2026 to 3%, lower than 3.5% for 2025, while the technology boom mainly benefits a select group of countries within supply chains, bypassing most others.

Georgieva compared artificial intelligence to a “slow-moving tsunami,” which is expected to ultimately affect around 40% of jobs globally, leading to displacement or weakened job functions. In developed economies, the impact is estimated at around 60%, while in low-income countries it’s about 23%, mainly because the technology has not yet become widespread. Young people entering the workforce are particularly vulnerable, as AI is replacing routine tasks required for entry-level positions. At the same seminar, Singapore President Tharman Shanmugaratnam noted that first-job opportunities for graduates are already decreasing and warned that if governments do not act, AI could widen the gap between developed and developing countries even further.

Artificial intelligence may also strain public finances by shifting income from labour to capital owners, leading to a loss in government tax bases. World Bank President Ajay Banga stated that the bank is supporting “small AI” tools that do not rely on large language models, specifically designed for farmers, clinics, and schools in emerging markets. In her Singapore speech, Georgieva underscored that advances in AI technology are themselves adding to inflation, and she warned that massive borrowing by AI companies to develop the technology could cause poor financial performance to spread across markets. The International Monetary Fund will release its “World Economic Outlook” report at 9 a.m. Bangkok time (10 p.m. Monday in New York) on 13 October, marking the first revision of the 3% global growth forecast since July.