IMF warns AI could affect 40% of jobs worldwide

The International Monetary Fund (IMF) has warned that artificial intelligence (AI) could affect about 40 per cent of jobs globally, urging governments to reform education, taxation and labour policies to prepare workers for a rapidly changing employment market.

IMF Managing Director, Kristalina Georgieva, gave the warning during a panel session titled “Small Scale AI: More and Better Jobs” at the 2026 IMF/World Bank Annual Meetings in Bangkok, Thailand, on Monday.

She described AI as a “slow-moving tsunami” for the labour market, warning that the technology could enhance workers’ productivity, reduce the value of some roles or eliminate certain jobs altogether.

According to her, IMF estimates indicate that AI could affect about 60 per cent of jobs in advanced economies, compared with 23 per cent in low-income countries.

She explained that the lower exposure in low-income economies reflected the slower adoption of AI rather than greater protection against its potential effects.

Georgieva said AI-related investments were already stimulating economic activity in some countries through the construction of data centres and the development of AI models.

She identified the United States, China and India as major producers of AI technology, while several Asian countries, including Thailand, were contributing to the infrastructure required to support its expansion.

According to her, these investments were helping sustain global economic growth at about three per cent despite the drag from energy supply shocks.

She, however, said the next phase of AI development would depend increasingly on adoption, creating opportunities for more countries to benefit if they established the necessary infrastructure, skills and regulatory safeguards.

The IMF chief said developing economies needed reliable electricity, digital infrastructure, appropriate skills and effective government safeguards to ensure that AI adoption was safe and inclusive.

She cited IMF estimates showing that AI could add between 0.5 and one percentage point to growth in advanced Asian economies, while emerging Asian economies could record additional growth of between 0.2 and 0.8 percentage points.

Georgieva said an additional one percentage point of growth could more than offset the economic losses associated with rapidly ageing populations in advanced Asian economies.

On employment trends, she said an IMF study in the United States found that about 10 per cent of jobs already required advanced AI skills, with such positions generally attracting higher pay.

She added that routine and repetitive jobs were declining, while lower-paying employment opportunities were increasing in areas such as data centre construction and related services.

Although the study found a positive net employment impact in the areas examined, Georgieva said the concentration of new jobs in lower-paying roles raised concerns about the quality of employment being created.

She identified young people entering the labour market as particularly vulnerable, noting that routine entry-level positions traditionally provide opportunities for graduates to acquire experience and progress in their careers.

Georgieva urged governments to strengthen labour market monitoring, reform education systems to promote lifelong learning and reconsider tax policies as AI changes the balance between labour and capital.

She warned that a shift towards greater reliance on capital and reduced dependence on human labour could affect government revenue, potentially limiting the resources available to support workers through the transition.

Despite the risks, she expressed hope that AI would take over undesirable tasks, allowing people to benefit from higher productivity, improved living standards and more meaningful participation in society.

“Get AI to do all the stuff we don’t want to do and let us enjoy the things we love to do,” she said.

President of Singapore, Tharman Shanmugaratnam, said AI-driven job displacement would occur gradually, task by task, giving workers and employers time to adapt through workplace learning and skills development.

He, however, expressed concern about declining demand for entry-level jobs, particularly in technology-related sectors, warning of the potential implications for fresh graduates.

Shanmugaratnam called on governments to work with the private sector to create employment opportunities for graduates, stressing that securing a first job was critical to building skills, experience and confidence.

He also advocated reforms in tertiary education to reduce excessive emphasis on academic qualifications