Tue, Jan 16, 2024 page12

• AI holds risks, ‘tremendous opportunity’ for world economy, IMF’s Georgiev says

  • AFP, WASHINGTON
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  Artificial intelligence (AI) poses risks to job security around the world, but also offers a “tremendous opportunity” to boost flagging productivity levels and fuel global growth, IMF managing director Kristalina Georgiev said in an interview with Agence France-Presse

  AI will affect 60 percent of jobs in advanced economies, Georgieva said in Washington, shortly before departing for the annual World Economic Forum in Davos, Switzerland.

  With AI expected to have less effect in developing countries, about “40 percent of jobs globally are likely to be impacted,” she said, citing a new IMF report.

  

  IMF managing director Kristalina Georgieva speaks during an interview with Agence France-Presse at IMF headquarters in Washington on Wednesday last week.

  Photo: AFP

  “And the more you have higher skilled jobs, the higher the impact,” she added.

  However, the IMF report published on Sunday evening notes that only half of the jobs impacted by AI would be negatively affected; the rest might actually benefit from enhanced productivity gains due to AI.

  “Your job may disappear altogether — not good — or artificial intelligence may enhance your job, so you actually will be more productive and your income level may go up,” Georgieva said.

  The IMF report predicted that, while labor markets in emerging markets and developing economies would see a smaller initial impact from AI, they are also less likely to benefit from the enhanced productivity that would arise through its integration in the workplace.

  “We must focus on helping low income countries in particular to move faster to be able to catch the opportunities that artificial intelligence will present,” Georgieva said.

  “So artificial intelligence, yes, a little scary. But it is also a tremendous opportunity for everyone,” she said.

  The IMF is due to publish updated economic forecasts later this month, which would show the global economy is broadly on track to meet its previous forecasts, she said.

  It is “poised for a soft landing,” Georgieva said, adding that “monetary policy is doing a good job, inflation is going down, but the job is not quite done.”

  “So we are in this trickiest place of not easing too fast or too slow,” she said.

  This year is likely to be “a very tough year” for fiscal policy worldwide, as countries look to tackle debt burdens accumulated during the COVID-19 pandemic and rebuild depleted buffers, Georgieva said.

  Billions of people are also due to go to the polls this year, putting additional pressure on governments to either raise spending or cut taxes to win popular support.

  “About 80 countries are going to have elections, and we know what happens with pressure on spending during election cycles,” she said.

  The concern at the IMF is that governments around the world spend big this year and undermine the hard-won progress they have made in the fight against high inflation, she said.

  “If monetary policy tightens and fiscal policy expands, going against the objective of bringing inflation down, we might be for a longer ride,” she said.
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