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IMF Chief Sees AI Impacting Labor like a “Tsunami” IMF Chief Sees AI Impacting Labor like a “Tsunami”
AI is poised to dramatically impact the global labor market, akin to a “tsunami” according to International Monetary Fund Managing Director... IMF Chief Sees AI Impacting Labor like a “Tsunami”

AI is poised to dramatically impact the global labor market, akin to a “tsunami” according to International Monetary Fund Managing Director Kristalina Georgieva. Speaking at an event organized by the Swiss Institute of International Studies in Zurich, Georgieva highlighted the urgent need for preparation as AI threatens to transform job markets worldwide.

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Georgieva warned that AI could affect 60% of jobs in advanced economies and 40% of jobs globally within the next two years. “We have very little time to get people ready for it, businesses ready for it,” she emphasized. This is a similar level predicted by a Goldman Sachs study last year.

This rapid technological advancement presents both opportunities and challenges, with the potential to significantly boost productivity if managed well. However, Georgieva cautioned about the risks of increased misinformation and growing inequality.

Reflecting on recent global disruptions, Georgieva noted that the world economy has shown remarkable resilience despite facing significant shocks, such as the COVID-19 pandemic and the ongoing war in Ukraine. She acknowledged the likelihood of future shocks, particularly due to the climate crisis, but reassured that the global economy remains robust.

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We are not in a global recession,” Georgieva stated, countering fears from the previous year. “Last year, there were fears that most economies would slip into recession; that didn’t happen. Inflation that has hit us with a very strong force is on the decline, almost everywhere.

Swiss National Bank (SNB) Chairman Thomas Jordan, who also spoke at the event, discussed the inflation situation in Switzerland. He noted that the fight against inflation in Switzerland was now well advanced, with inflation rates stabilizing within the SNB’s target range of 0-2%.

In April, inflation rose to 1.4%, marking the 11th consecutive month that price rises have been within the SNB’s target range,” Jordan said. “The outlook for inflation is much better. It looks that for the next few years, inflation could be really in the same range of price stability. But there is a lot of uncertainty.”

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Georgieva stressed the importance of managing the transition to an AI-driven economy effectively to harness its potential benefits while mitigating its risks. “It could bring a tremendous increase in productivity if we manage it well, but it can also lead to more misinformation and, of course, more inequality in our society,” she reiterated.

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