IMF, World Bank Warn of AI's Impact on Global Jobs

The International Monetary Fund (IMF) and the World Bank are issuing stark warnings regarding the impact of artificial intelligence (AI) on global labor markets. IMF Managing Director Kristalina Georgieva described AI as hitting labor markets like a "slow-moving tsunami," with approximately 40% of jobs worldwide potentially affected. Young graduates are identified as particularly vulnerable to job displacement as routine tasks become automated.

Singapore President Tharman Shanmugaratnam, co-chair of the World Bank's Jobs Council, called for permanent "crisis-era" support measures to help young people enter the workforce. He urged governments to collaborate with the private sector and incentivize firms to hire recent graduates, noting a decrease in demand for entry-level positions.

World Bank President Ajay Banga emphasized the role of private capital in job creation. He estimates that 1.2 billion young people will reach the age of 18 over the next 15 years, with the private sector expected to absorb most of them. Governments, he stated, should facilitate this by investing in infrastructure, policy development, and de-risking private investment.

The IMF projects that around 40% of global jobs will eventually be "augmented, downgraded or eliminated" due to AI. The impact is estimated at 60% in advanced economies and 23% in low-income countries, though Georgieva noted that the difference in lower-income nations is due to AI's slower arrival rather than lesser overall impact.

AI is also noted as a significant driver for economic growth, potentially boosting global productivity. Georgieva suggested that AI adoption could increase growth by 0.5 to 1.0 percentage points in advanced Asian economies and 0.2 to 0.8 percentage points in emerging Asian economies, which could offset losses attributed to aging populations.