Global Economy Can't Afford AI Misstep, IMF Managing Director Warns

By Fabiana Negrin Ochoa

BANGKOK--The investment flowing into artificial intelligence will likely exceed the vast sums spent building railroads, the electricity grid and the Internet.

If that translates into significant productivity gains, global growth could increase to the tune of half a percentage point annually over the next decade, the International Monetary Fund's managing director says.

But that potential upside comes with daunting risks that could be massively disruptive for the labor market and financial systems, Kristalina Georgieva said Friday.

The rush to build out AI capacity has already lifted growth in economies like the U.S.

Economists at ING calculate that AI will account for a third of U.S. growth this year.

In a paper published by the Brookings Institution, economist Stijn van Nieuwerburgh estimated that investment in AI infrastructure and specialized chips will reach $10.3 trillion over 2025 to 2032--an average of 3.63% of U.S. gross domestic product per year.

Asian hardware producers like South Korea and Taiwan have benefited too, with the IMF raising GDP forecasts for both economies sharply to reflect the surge in AI-related exports growth.

But while the demand boost is immediate, Georgieva said it will likely take time for productivity gains to materialize.

In the meantime, a lot could go wrong.

"In a severe scenario, we could see a market correction that cascades through the highly leveraged and circular AI ecosystem," said the IMF chief.

Big earnings misses from AI developers could undermine profitability expectations, dealing a hit to equity prices, she said. "Given the sizable cross-border holdings of AI assets, losses could spread around the world."

The blow to the job market could be profound. Georgieva said it is still too early to predict what the toll on employment would be, but IMF research has found that about 40% of jobs globally are exposed to AI. That number rises to around 60% in advanced economies.

AI advances raise cybersecurity threats too. As AI models become more sophisticated, concerns are growing that companies and governments won't be able to defend critical systems against rogue attacks.

"A major attack affecting payments, trading, or access to deposits could cause immediate losses and undermine confidence," Georgieva said.

Protecting against those threats means rapidly scaling cyber defenses and safeguarding financial and macroeconomic stability, the IMF said.

Central banks must stay on their toes to watch for the impact of AI on inflation, while on the fiscal side, officials need to ensure there is room to invest in infrastructure and skills, Georgieva said.

"AI may raise growth, but it could also reduce labor income, increase inequality, and erode the tax base," Georgieva said. "With debt already high, policymakers will need to make hard choices."

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

October 15, 2026 18:14 ET (22:14 GMT)