IMF warns AI could displace 60% of jobs in advanced economies

The International Monetary Fund (IMF) has issued a stark warning that artificial intelligence could significantly disrupt labor markets, potentially impacting up to 60% of jobs in advanced economies. The IMF highlighted that while AI adoption is driving productivity and economic growth, with investments projected to exceed $2 trillion globally in 2026, it poses substantial risks, particularly to middle-skilled workers whose roles are highly susceptible to automation.

According to IMF research, individuals possessing AI-related skills are experiencing higher earnings. Furthermore, low-skill workers in service roles supporting higher earners are also benefiting. However, the report emphasizes that middle-skilled workers are being left behind, facing potential job displacement and wage stagnation. The IMF is actively monitoring these macroeconomic implications and developing AI indexes to assist member countries in navigating the evolving AI landscape, focusing on areas such as workforce training, digital infrastructure, and regulation.

Beyond labor market concerns, the IMF also pointed to financial risks associated with AI investments. The potential for a sharp reversal in equity valuations, wealth destruction, and subsequent layoffs exists if the payoff from debt-financed AI investments proves illusory. Circular financing arrangements within the AI sector, where firms act as each other's customers, investors, and financiers, are noted as increasing the risk of problems cascading through the industry. The IMF Executive Board is engaged in multilateral surveillance to monitor these risks.