IMF chief compares AI impact on labour to a ‘tsunami’

ZURICH: AI is poised to drastically reshape the global labour market, according to International Monetary Fund Managing Director Kristalina Georgieva. She likened its impact to a ‘tsunami’, projecting that 60% of jobs in advanced economies and 40% worldwide will be affected within the next two years. Georgieva emphasised the urgency of preparing individuals and businesses for this imminent transformation, speaking at an event organised by the Swiss Institute of International Studies in Zurich.

“We have very little time to get people ready for it, businesses ready for it,” she told the event organised by the Swiss Institute of International Studies, associated to the University of Zurich.

“It could bring tremendous increase in productivity if we manage it well, but it can also lead to more misinformation and, of course, more inequality in our society.”

“We are not in global recession,” said Georgieva, who was heckled by protesters calling for action on climate change and tackling developing world debt.

While AI adoption promises significant gains in productivity, Georgieva warned against potential downsides, including the proliferation of misinformation and the exacerbation of societal inequality. She highlighted the recent vulnerabilities of the world economy, citing shocks like the 2020 global pandemic and the ongoing conflict in Ukraine. Despite these challenges, she noted a resilience in the global economy, with no imminent signs of a widespread recession.

“Last year there were fears that most economies would slip into recession, that didn’t happen,” she said.

“Inflation that has hit us with a very strong force is on the decline, almost everywhere.”