With AI, IMF Avers Old Jobs May Vanish Before New Ones Arrive

WASHINGTON, D C-The rapid advances in artificial intelligence (AI) have yet to translate into measurable gains in global productivity, even though the technology has the potential to significantly boost economic growth in the years ahead, the International Monetary Fund (IMF) said.

Speaking during a group interview with reporters from India, Japan, the UAE, the Netherlands and Chile, IMF Chief Economist Pierre-Olivier Gourinchas said current macroeconomic data does not yet reflect the impact of AI adoption.

“Our assessment right now is that… we don’t yet see productivity gains at a macro level coming from AI in the numbers we have,” Gourinchas said.

He said technological progress has been striking, but its widespread deployment remains limited.

“We’ve been absolutely impressed by the progress… but we’re not yet seeing the macroeconomic implication,” he said.

Despite the lack of visible gains so far, the IMF sees AI as a major upside factor for future growth.

“Our estimates… can go from 0.1 to 0.4” percentage points increase in productivity growth annually, he said, adding that some projections are even higher.

However, Gourinchas cautioned that the transition could bring disruption, particularly in labor markets.

“There might be some signs that there is a little bit of a softening” in hiring, especially for entry-level positions, he said, pointing to early indications of AI’s impact on employment.

While dismissing the likelihood of permanent mass unemployment, he said the nature of work is likely to change significantly.

He warned that the transition period may be uneven, with older jobs disappearing before new roles are created.

Another concern flagged by the IMF is the possibility of financial instability linked to excessive investment and inflated valuations in the AI sector.

“You could have a situation where the market got ahead of itself,” Gourinchas said, noting that multiple firms are attracting large-scale funding in a highly competitive environment.

“Maybe there’s room for one or two… and all the others will just bite the dust,” he said, warning of overinvestment and misallocation of capital. (IANS)–