IMF and World Bank: AI a "slow-moving tsunami" that threatens jobs worldwide

The heads of the IMF and the World Bank warned that artificial intelligence (AI) is reshaping labour markets worldwide and could put large numbers of jobs at risk, especially for young people entering the workforce.

Leaders point to a generational challenge

IMF Managing Director Kristalina Georgieva described AI’s arrival as a “slow-moving tsunami” whose effects will unfold over time. "A slow-moving tsunami, but still a tsunami. We estimate the impact over time on jobs globally at about 40% – jobs are either enhanced, or degraded, or eliminated, and we are already seeing part of this impact," she said.

Georgieva cautioned that lower exposure in poorer countries is not an advantage but partly reflects slower access to and adoption of the technology. She compared the pace of AI development to a Formula 1 race, arguing that regulation and protective barriers are struggling to keep up and that safety standards are needed to prevent harm.

Speaking at the same annual meetings in Bangkok, Tharman Shanmugaratnam, President of Singapore, urged governments to work with the private sector to protect young people’s first jobs. "Governments must engage with the private sector to enable that first job, to enable that pathway to the first rung of your career. You cannot afford to lose that, because if you lose it, not only will you have that group of young people waiting a year, and then competing with the next group the next year, but you will also lose more than a year of skills," he said.

The World Bank’s president, Ajay Banga, highlighted a demographic challenge that will add to the pressure from technological change: in the next 15 years roughly 1.2 billion young people in developing countries will reach working age, while current projections suggest these economies may create only about 400 million jobs over the same period. He noted that governments should invest in infrastructure, education and a business environment, while most jobs are ultimately created by the private sector — which in some economies accounts for between 75 and 85 percent of employment.

On monetary policy, Federal Reserve official Kevin Warsh reassured markets about price stability. "At the Federal Reserve, we have made it clear that we will provide price stability and we removed a dose of adjustment about a month ago," he said.

No one can say with certainty how the labour market will look in five years. Officials recommended that some measures used during past crises — for example, programmes that encouraged companies to hire young people — be reconsidered not only as temporary crisis tools but as potential long-term policies to give young people a reliable first opportunity in the labour market.

Photo: press material from the event