Artificial intelligence (AI) is projected to impact nearly 40% of global jobs, with advanced economies expected to bear a greater share of the consequences compared to emerging markets and low-income countries, according to an analysis by the International Monetary Fund (IMF) reported by Bloomberg.

IMF Managing Director Kristalina Georgieva wrote in a blog post that, in most scenarios, AI is likely to exacerbate overall inequality and called for proactive measures by policymakers to prevent the technology from further intensifying social tensions.

The impact of AI on income inequality will hinge on how well the technology complements high earners. Increased productivity from high-income workers and companies could widen the wealth gap, Georgieva explained.

According to the IMF chief, countries should implement “comprehensive social safety nets” and retraining programs for vulnerable workers to mitigate these effects.

The IMF report, published on Sunday (14 January) evening, highlighted that, while there is potential for AI to fully replace some jobs, the more probable scenario is that it will complement human work. Advanced economies may witness about 60% of jobs affected, surpassing the impact on emerging and low-income countries.

However, the report noted that only half of the jobs affected by AI will face negative consequences; the rest may benefit from enhanced productivity gains due to AI integration.

“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 wrote.

Georgieva’s comments align with discussions at the World Economic Forum in Davos, where global business and political leaders are deliberating on AI. Some companies have raised concerns among employees by investing heavily in AI, with examples such as Buzzfeed Inc. using AI for content creation and restructuring its news department.

While the European Union has reached a tentative deal on AI legislation, the US is still considering its federal regulatory stance on the matter.

The IMF report predicts that emerging markets and developing economies will experience a smaller initial impact from AI on labour markets but are also less likely to benefit from the productivity gains that AI integration may bring.

The IMF chief stressed the importance of helping low-income countries seize the opportunities presented by artificial intelligence.

While addressing the potential challenges of AI, she acknowledged its tremendous opportunity for everyone.

She also acknowledged the need for an AI-related productivity boost to sustain global economic growth, emphasising the importance of unlocking productivity for a positive global narrative.

The IMF is set to publish updated economic forecasts later this month, indicating that the global economy is broadly on track to meet previous projections.

Georgieva cautioned that 2024 is likely to be a “very tough year” for fiscal policy worldwide due to countries addressing debt burdens from the Covid-19 pandemic and managing depleted buffers.

With billions of people heading to the polls this year, Georgieva expressed concern that governments might face pressure to increase spending or cut taxes to gain popular support, potentially undermining progress made in the fight against high inflation.

Source: The Business Standard