IMF: AI investment could reshape global productivity, labour markets

The International Monetary Fund (IMF) has said the rapid development and adoption of Artificial Intelligence (AI) could transform productivity, investment, labour markets and economic policies around the world.

At the same time, the fund warned that AI could generate significant risks for workers, businesses and national economies.

The IMF stated this in its 2026 Annual Report, “Navigating a Precarious World,” released on Wednesday.

According to the report, some external estimates indicate that private-sector AI investment could exceed $2 trillion globally in 2026, potentially making the technology one of the fastest-growing sources of economic growth.

The fund said AI-related technology investments contributed an estimated 0.5 percentage point to US GDP growth in 2025.

It also noted that US productivity growth had accelerated in recent years, adding that the improvement might partly be linked to the early adoption of AI.

As spending on AI deployment expands across industries, the IMF said productivity gains from the technology could accelerate across a broad range of sectors and occupations.

The fund highlighted Asia’s growing focus on AI, noting that Singapore ranked first on its AI Preparedness Index. It attributed the country’s position to its digital infrastructure, education and forward-looking regulation.

“East Asia is a hub for chip manufacturing and design, while South-East Asia is building on its strength in manufacturing to move up the value chain as well.”

Despite the potential benefits, the IMF cautioned that rapid AI adoption could disrupt labour markets significantly.

The report said policymakers, businesses and households were increasingly concerned about possible job losses and wage reductions for some groups of workers as AI changes the nature of employment.

IMF research cited in the report showed that workers with AI-related skills earned more, although cities and regions with large concentrations of AI-related jobs were not necessarily recording overall job growth.

The fund said workers with AI skills were benefiting, along with workers in low-skilled occupations, such as restaurant employees serving higher-income earners.

“Left out are middle-skilled workers whose jobs are highly exposed to automation.”

The IMF also raised concerns about businesses taking on substantial debt to finance AI investments.

It warned that projected returns from costly AI investments might fail to materialise, potentially resulting in sharp falls in equity valuations, wealth destruction and layoffs.

The fund further identified potential systemic risks within the AI ecosystem, particularly among hyperscalers building data centres and chipmakers.

It said circular financing arrangements, in which a small group of companies simultaneously act as customers, investors and financiers to one another, could increase the risk of financial problems spreading across firms.

The IMF said its Executive Board continued to monitor such risks through multilateral surveillance.

The fund also said it was helping member countries respond to the rapidly evolving AI environment through indexes measuring national preparedness, skills readiness and skills imbalance.

These tools enable countries to identify strengths and weaknesses in workforce training, digital infrastructure, venture capital and regulation.

According to the report, the indexes support the IMF’s analysis of macro-critical AI issues, including productivity and growth, labour markets, inequality, financial markets, energy and climate.

The IMF said it was also helping countries learn from governments that are leading in AI policy and adapt those experiences to their individual circumstances.

This, it said, would support tailored advice on structural policies, including helping workers manage AI-driven transitions and assessing the technology’s potential effects on economic growth, inflation, monetary policy and fiscal policy.

The fund added that it was helping member countries prepare for economic, financial stability and fiscal risks that could arise if AI investment entered a downturn, particularly where public debt levels were already high.

The IMF said countries must manage the risks posed by AI while continuing to pursue the potential economic benefits of the technology.

Beyond AI, NAN reports that the 2026 IMF report identified rising public debt, trade reorientation and digital currencies as other major forces influencing the global economy.

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