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40% of employment worldwide might be impacted by AI, IMF chief says ‘tough year ahead’

The global economy might benefit from an AI-related productivity increase, as the IMF believes it will continue to expand at historically low rates over the medium term.

According to the IMF’s president, artificial intelligence poses challenges to global job security while simultaneously providing a “tremendous opportunity” to increase declining productivity levels and fuel global development.

Kristalina Georgieva, managing director of the International Monetary Fund, said in an interview in Washington, shortly before leaving for the annual World Economic Forum in Davos, Switzerland, that artificial intelligence will touch 60% of employment in industrialised nations.

With AI projected to have less influence in underdeveloped nations, she stated that “40 percent of jobs globally are likely to be impacted,” citing a new IMF research. “And the more you have higher skilled jobs, the higher the impact,” she went on to say.

The IMF research, which was released on Sunday evening, does point out that only half of the occupations that AI will effect would suffer; the other jobs may potentially gain from increased productivity as a result of 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 stated.

Uneven effects.

According to the IMF report, while AI will have a lesser initial impact on labour markets in emerging markets and developing countries, they are also less likely to gain from increased productivity as a result of 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 was quoted as saying by AFP. “So, artificial intelligence is a bit terrifying. But it’s also a fantastic chance for everyone,” she explained.

The IMF is set to provide new economic predictions later this month, which will indicate that the global economy is on pace to fulfil prior projections, she added.

The economy has been “poised for a soft landing,” she stated. She went on to say 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 went on to say.

The global economy might benefit from an AI-related productivity increase, as the IMF believes it will continue to expand at historically low rates over the medium term.

“God, how much we need it,” Georgieva said. “Unless we figure out a way to unlock productivity, we as the world are not for a great story.”

2024 will be “a very tough year”

Georgieva predicted that 2024 will be “a very tough year” for global fiscal policy, as governments seek to address debt burdens accrued during the Covid-19 epidemic and rebuild depleted buffers. This year, billions of people will vote, placing further pressure on governments to increase expenditure or reduce taxes in order to gain public support.

“About 80 countries are going to have elections, and we know what happens with pressure on spending during election cycles,” she went on to say. According to Georgieva, the IMF is concerned that governments throughout the world will spend more this year, undermining the hard-won success they have achieved in combating rising inflation. “If monetary policy tightens and fiscal policy expands, going against the objective of bringing inflation down, we might be for a longer ride,” the economist said.

Georgieva, whose five-year tenure as IMF chief expires this year, declined to comment on whether she intended to run for a second term. “I have a job to do right now and my concentration is on doing that job,” she went on to say.

“It has been a tremendous privilege to be the head of the IMF during a very turbulent time, and I can tell you I’m quite proud of how the institution coped,” she said. “But let me do what is in front of me right now,” she added.

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Dr. Shubhangi Jha

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