IMF chief Kristalina Georgieva says AI is hitting the global labour market like a “slow-moving tsunami”, with young graduates first in line. The IMF estimates about 40 percent of jobs worldwide will eventually be “augmented, downgraded or eliminated”. Policymakers are now debating how to cushion the fallout.
At the IMF and World Bank meetings in Bangkok on Monday, October 12, policymakers moved from asking whether AI will hit jobs to discussing how to soften the blow, CNBC reported.
‘A Slow-Moving Tsunami’
IMF Managing Director Kristalina Georgieva said AI is hitting the labour market like a “slow-moving tsunami”, and that “people to worry about, first and foremost, are young people that are coming into the labor market”. Entry-level, routine jobs are the ones most at risk.
The Numbers
- About 40 percent of jobs worldwide will eventually be “augmented, downgraded or eliminated”, the IMF estimates
- Exposure is about 60 percent in advanced economies and 23 percent in low-income countries, though Georgieva said poorer nations are not better off, because AI is “just further away”
- World Bank President Ajay Banga estimates 1.2 billion young people will turn 18 over the next 15 years, and the private sector, which generates 75 to 85 percent of jobs in any country, will have to absorb most of them
‘Crisis-Era’ Measures Made Permanent
Singapore’s President Tharman Shanmugaratnam, who co-chairs the World Bank’s Jobs Council, urged governments to turn pandemic- and financial-crisis-style support for youth employment into a permanent tool. That means working with the private sector and encouraging firms to hire new graduates, because “the first rung in employment, your first job upon graduation, is now seeing less demand”.
He said that in the US, “for the first time in a century, demand for graduates has gone down”, and the wage premium for a college degree is shrinking.
AI Is Also Propping Up Growth
Georgieva said AI-related investment and trade have lifted output in a handful of economies, helping keep global growth near 3 percent despite an energy supply shock. She estimated AI adoption could add 0.5 to 1 percentage point to growth in advanced Asia and 0.2 to 0.8 points in emerging Asia. At the high end, that “would more than offset the loss that comes from aging population”.
Growth Without Jobs?
Shanmugaratnam warned that growth alone may not create jobs: China, India and developing Southeast Asia are “growing quite well, but job creation is weak”.
Banga said governments should build infrastructure, set policy and “de-risk” private capital: “It is private capital that creates jobs.”
Image: IMF Managing Director Kristalina Georgieva at Wall Street Journal House, September 2025 (file photo). Photo: Xuthoria / Wikimedia Commons (CC BY-SA 4.0)
