Georgieva’s framing of AI as both a demand and an investment shock lines up with this week’s hawkish Fed commentary, which also pointed to AI-driven capital spending as a source of persistent inflation pressure, strengthening the case that the AI boom keeps rates higher for longer. Her estimate that AI investment could add half a point to a full point to growth in advanced Asian economies supports regional equities and currencies tied to the tech supply chain, such as Taiwan, South Korea and Singapore. The warning that AI could shift income from labour to capital, and erode governments’ main tax base, adds a longer-term fiscal risk for heavily indebted sovereigns. The IMF’s World Economic Outlook on Tuesday is the next catalyst, with markets watching whether the fund upgrades its growth forecasts on the strength of AI investment or cuts them on the energy shock.
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Earlier:
Broadcom CEO likens AI boom to a casino even as he targets $230 billion in chip sales
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The IMF sees AI holding up the world economy and slowly hollowing out its job market at the same time, and the newest graduates are first in line.
Summary:
IMF Managing Director Kristalina Georgieva called AI a slow-moving but lasting threat to jobs on the opening day of the IMF and World Bank annual meetings in Bangkok
She said the IMF expects about 40% of jobs worldwide to be augmented, downgraded or eliminated by AI over time, with routine work already hollowing out while lower-paid jobs grow
Singapore President Tharman Shanmugaratnam said AI is already cutting demand for graduates’ first jobs; in Singapore, the share of new graduates in full-time work fell to around 74% from about 88% for the 2022 cohort
Georgieva said AI investment is acting as a demand and investment shock that could lift growth in advanced Asian economies by half a point to a full point, helping keep global growth around 3% despite an energy supply shock
She warned AI could erode taxes on labour, governments’ main revenue source, and urged policymakers to act now
The IMF’s World Economic Outlook, with updated forecasts, is due on Tuesday
International Monetary Fund Managing Director Kristalina Georgieva warned on Monday that artificial intelligence poses a lasting threat to jobs, describing it as a slow-moving but unmistakable tsunami as the IMF and World Bank annual meetings opened in Bangkok.
Georgieva has used the tsunami comparison several times this year, but her latest remarks, reported by Bloomberg, added that the shift is unfolding gradually. She said AI is already reducing demand for routine, repetitive work while adding lower-paid jobs in sectors such as construction, an outcome she said was nothing to celebrate. The IMF expects about 40% of jobs worldwide to be augmented, downgraded or eliminated by AI over time. That estimate builds on IMF research first published in January 2024, which put exposure at roughly 60% of jobs in advanced economies, 40% in emerging markets and 26% in low-income countries. It also found that about half of exposed jobs in rich economies could benefit from AI rather than lose out.
Singapore President Tharman Shanmugaratnam, speaking at the same meetings, said the first rung of employment, the first job after graduation, is seeing less demand, and that the evidence is clearest in the sectors most exposed to AI, Reuters reported. Singapore’s own data illustrate the point. Around 74% of its 2025 university graduates in the labour force found full-time work, down from about 88% of the 2022 cohort, while the share unemployed and seeking work rose to about 10% from under 4%, according to a Ministry of Education survey.
The causes are still debated. A Harvard working paper found junior employment fell by about 9% at firms that adopted generative AI, relative to those that did not. A May 2026 study by researchers at the University of Warwick, the London School of Economics and Oxford found that much of AI’s apparent effect on junior hiring faded once exposure to remote work was taken into account.
Georgieva also stressed that AI is supporting the world economy. She described the boom as a demand and investment shock that could lift growth in advanced Asian economies by between half a percentage point and a full point, Reuters reported, and said it is helping keep global growth around 3% despite an energy supply shock. She flagged a longer-term risk for public finances: by tilting economies toward capital and away from labour, AI could erode the taxes on work that have traditionally been governments’ main source of revenue.
Georgieva urged policymakers to assess developments carefully and act on the lessons now. The IMF’s World Economic Outlook, with updated growth forecasts, is due on Tuesday and will show how heavily the fund is weighing AI investment against the energy shock.
This article was written by Eamonn Sheridan at investinglive.com.
