IMF Chief Georgieva Discusses AI's Role in Productivity, Wages, and Job Security

As the Artificial intelligence technology is growing the risk of job security is growing around the world. But this technological growth offers great opportunities which will boost productivity and economic growth says the IMF managing director Kristalina Georgieva. 

In an interview, she forecasted that AI will impact 60% of jobs in advanced economies, with higher-skilled roles most affected. However, she stressed that AI could also improve many jobs, potentially increasing productivity and wages. "AI will affect 60% of jobs in advanced economies," Kristalina Georgieva told AFP in an interview before the World Economic Forum in Davos. "And the more you have higher-skilled jobs, the higher the impact."

Georgieva also emphasized that not all jobs will be negatively affected. The IMF report released on Sunday notes that only half of AI-impacted jobs will be lost, while the rest could benefit from increased productivity gains. "Your job may disappear altogether, not good," Georgieva said. "But AI may also enhance your job, making you more productive and potentially boosting your income." Georgieva acknowledged that emerging markets and developing economies will likely see a smaller initial impact from AI but also slower productivity gains. She urged the IMF to focus on helping these countries "catch the opportunities that AI will present."

Despite the challenges, Georgieva sees AI as a positive force overall. "Artificial intelligence, yes, a little scary. But it is also a tremendous opportunity for everyone," she said. The IMF chief expressed optimism about the global economy, expecting it to meet previous growth forecasts. She called the current state a "soft landing," noting that inflation is easing but central banks "must not ease too fast or too slow."

Georgieva acknowledged the need for an AI-driven productivity boost, emphasizing that the global economy is expected to continue growing at historically subdued levels. "God, how much we need it," she said. "Unless we unlock productivity, we are not for a great story." Turning to fiscal policy, Georgieva predicted a "very tough year" as countries tackle pandemic-generated debt and rebuild depleted buffers. With elections in 80 countries this year, she expressed concern that governments might increase spending or cut taxes, potentially undermining progress on inflation.

"If monetary policy tightens and fiscal policy expands, going against the objective of bringing inflation down, we might be for a longer ride," she warned. When asked about seeking a second term at the IMF, Georgieva declined to comment. "I have a job to do right now and my concentration is on doing that job," she said, expressing pride in the IMF's response to recent global challenges. "But let me do what is in front of me right now."