The head of the International Monetary Fund (IMF), Kristalina Georgieva, warned on Monday about the disruptive effects of artificial intelligence (AI) on jobs and taxes. Speaking at the annual meetings of the IMF and World Bank in Bangkok, she called AI a "slow-moving tsunami." She said it is already reducing demand for many human workers by taking over routine tasks.
Key Details
Georgieva pointed out that while AI is creating low-paying jobs in sectors like construction, this is "not a story to celebrate." She stressed that policymakers need to rethink education and act now to help society adapt to these changes. The IMF chief warned that AI could hurt government revenues by shifting the economy toward capital and away from labor. Labor has traditionally been the main source of tax income.
Her comments reflect growing concerns about AI's impact on jobs and global inequality. Young workers in fields affected by AI have already seen a slowdown in hiring. This makes new entry-level applicants more vulnerable. Georgieva noted that the benefits of AI have mostly gone to a small group of workers and economies, despite a global surge in investment.
Background
Despite these challenges, Georgieva said that AI could ultimately help growth. The IMF estimates that AI could add up to one percentage point to growth in advanced Asian economies, which she called a "very big deal."
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The concerns raised by Georgieva could affect investor sentiment in sectors that rely on labor, like construction and technology. A shift toward AI may lead to more capital investments while reducing labor demand. This could impact employment rates and tax revenues. Watch for more discussions on AI policy and its effects on the job market at upcoming economic forums.
Based on reporting by: irishtimes.com, businesstimes.com.sg