WASHINGTON – The head of the International Monetary Fund (IMF) has warned of the disruptive threat from artificial intelligence to the labour market and taxation, urging policymakers to rethink education and act now to help society adapt.
“It is a slow-moving tsunami, but tsunami nonetheless,” managing director Kristalina Georgieva said on Oct 12 during her first appearance at the annual meetings of the IMF and World Bank in Bangkok.
Speaking at a session on AI’s impact on employment, she said the technology is already hollowing out demand for many human workers by taking over routine, repetitive tasks. At the same time, it is increasing low-paying jobs in sectors like construction, which she said is “not a story to celebrate”.
It is a transformation with far-reaching consequences for public finances, Georgieva said.
The risk is that AI strains government revenues by tilting the economy towards capital and away from labour – traditionally the main source of tax income.
The comments are the latest warning about the potential shock from AI on jobs and the global economy.
Young workers in AI-exposed fields have already seen a slowdown in hiring, leaving new entry-level applicants far more vulnerable. Concern is also growing that the technology will widen inequality, with its gains so far concentrated among a narrow set of workers and economies despite a global investment supercycle.
“We cannot today imagine what exactly the world of work will be five years from now,” she said. “But we can be disciplined and carefully assess what is happening, and then draw lessons, but – most importantly – act on them now.”
Despite the employment headwinds, the technology can ultimately prove a positive for growth overall. The IMF estimates the spread of AI can add up to a percentage point to growth in advanced Asian economies.
Such a growth boost “is a very big deal”, Georgieva said, adding that it will “more than offset” the drag from ageing in rich countries across the region. BLOOMBERG