IMF Warns AI Could Disrupt 40% of Global Jobs as Technology Drives Economic Growth

The International Monetary Fund (IMF) has warned that artificial intelligence (AI) could significantly transform the global labour market, with approximately 40 per cent of jobs worldwide exposed to the technology as businesses increasingly adopt automated systems.

The warning comes amid growing investment in AI infrastructure, including data centres, advanced computer chips and software designed to perform tasks traditionally handled by human workers. While these investments are helping to support economic activity, concerns are mounting over potential job displacement, wage pressures and widening inequality.

IMF Managing Director Kristalina Georgieva highlighted the opportunities and risks associated with AI during the October 2026 annual meetings of the IMF and World Bank in Bangkok, Thailand.

According to a report by Technext24, Georgieva warned that AI could reshape employment opportunities and the way people work, raising questions about how governments, employers and workers should prepare for the transition.

AI Could Transform Four in Every Ten Jobs Worldwide

The IMF has previously estimated that nearly 40 per cent of employment worldwide is exposed to AI, although exposure does not necessarily mean that every affected job will disappear.

In its January 2024 analysis, the Fund explained that AI could complement workers by improving productivity in some occupations while automating tasks and reducing demand for certain roles in others.

The potential impact is particularly significant in advanced economies, where approximately 60 per cent of jobs could be affected because many occupations involve tasks that AI systems can perform or assist with.

In emerging markets and developing economies, the immediate exposure may be lower in some sectors, but limited digital infrastructure, inadequate training opportunities and weak social protection systems could make it more difficult for workers to benefit from the technology.

The distinction is important: AI exposure describes the potential for technology to affect a job, not a confirmed prediction that a particular percentage of workers will become unemployed.

AI Investment Supports Economic Activity

The rapid expansion of artificial intelligence has triggered substantial investment in computing infrastructure, software development and data processing facilities.

These investments create demand for computer chips, electricity, construction, telecommunications and other services required to operate AI systems.

Georgieva’s remarks, as reported by Technext24, linked the AI investment boom to the resilience of global economic growth, which has remained around 3 per cent despite significant economic challenges.

The expansion offers opportunities for countries and businesses that supply the infrastructure, expertise and services needed by the growing AI industry.

However, the benefits may not be distributed evenly. Companies that own advanced technology and intellectual property could capture a substantial share of the resulting economic value, while workers in vulnerable occupations may face pressure to retrain or seek new employment.

The central challenge is ensuring that the productivity gains generated by AI translate into broader improvements in living standards rather than being concentrated among a limited number of businesses and investors.

Entry-Level Jobs Face Growing Pressure

One of the major concerns surrounding AI adoption is its potential effect on entry-level employment, particularly in occupations involving routine administrative, analytical and digital tasks.

Businesses can use AI tools to draft documents, summarise information, process data, answer customer enquiries and assist with software development. As these capabilities improve, some employers may reduce recruitment for particular junior positions or expect fewer employees to complete the same volume of work.

During the Bangkok meetings, Singaporean President Tharman Shanmugaratnam also raised concerns about the implications of AI for entry-level employment and the opportunities available to young people entering the workforce.

The concern goes beyond immediate job losses. Entry-level positions often provide the practical experience, mentorship and workplace training that graduates need to progress into more senior roles.

If companies reduce these opportunities without developing alternative training pathways, young workers could struggle to acquire the experience required for long-term career advancement.

Nevertheless, the extent of this disruption will depend on how employers deploy AI, the emergence of new occupations and the ability of education systems to prepare workers for changing labour-market demands.

AI Could Widen Economic Inequality

The IMF’s warning also raises questions about the distribution of income and economic opportunities in an increasingly automated world.

Workers with advanced digital skills may benefit from AI-assisted productivity, higher-value responsibilities and access to emerging employment opportunities. Others whose jobs involve tasks that can readily be automated could face reduced bargaining power, stagnant wages or displacement.

Businesses that successfully integrate AI may also achieve greater productivity and profitability. However, these gains will not automatically translate into higher wages or improved conditions for their employees.

The outcome will depend partly on competition, labour-market institutions, education, taxation and government policies designed to ensure that the benefits of technological progress reach a broader section of society.

Without appropriate measures, countries could experience stronger economic output alongside persistent unemployment, insecure work and growing disparities between highly skilled workers and those with fewer opportunities to adapt.

Governments May Need to Rethink Taxation and Social Protection

As AI changes the relationship between human labour and business productivity, governments may face new questions about taxation and public spending.

Many public services and social protection programmes depend substantially on taxes associated with employment, personal income and business activity.

If automation changes employment patterns or shifts a larger share of economic value towards capital and technology ownership, governments may need to review whether existing tax systems remain adequate.

Possible policy responses include improving the taxation of economic activity, strengthening social protection, supporting displaced workers and investing in education and vocational training.

However, the precise implications for public revenue will vary across countries and industries. AI adoption does not automatically mean that tax receipts will decline, as higher productivity and increased business activity could also generate additional revenue.

The objective for policymakers should be to create a system that encourages innovation while providing effective support for people affected by economic restructuring.

World Bank Advocates Practical AI Solutions for Developing Economies

World Bank President Ajay Banga has emphasised the potential of smaller, targeted AI applications to help developing countries improve productivity without having to compete directly with the enormous infrastructure investments required to build the world’s largest AI systems.

Such applications could support agricultural advisory services, healthcare delivery, business operations and other essential activities.

For countries facing limited financial resources, unreliable electricity and inadequate digital infrastructure, practical AI tools may provide more immediate benefits than expensive projects that are difficult to maintain.

The approach also creates opportunities for local businesses and innovators to develop solutions tailored to their communities.

However, successful adoption will require affordable internet access, reliable electricity, digital skills, suitable data and safeguards against misuse.

Developing countries must also consider how to protect personal information and ensure that AI systems are reliable, transparent and appropriate for local needs.

What the IMF Warning Means for Nigeria

Nigeria has an opportunity to use AI to improve productivity, expand digital services and create new employment opportunities. However, the country must also prepare for the possibility that automation could affect workers in sectors such as banking, customer service, media, administration and information technology.

For Nigerian businesses, the priority should be to identify tasks that AI can improve while investing in employees who need to adapt to changing responsibilities.

For workers and graduates, developing digital literacy, critical thinking, communication, problem-solving and other transferable skills could improve their ability to respond to changes in the labour market.

Education providers also have a role to play in ensuring that students acquire practical skills rather than relying exclusively on traditional classroom instruction that may not reflect changing workplace requirements.

Nigeria’s ability to benefit from AI will depend on more than access to chatbots and automated software. Reliable electricity, affordable data, digital infrastructure and opportunities for quality training will be essential to broadening participation in the emerging AI economy.

Policymakers must also ensure that the adoption of AI supports job creation and entrepreneurship rather than focusing exclusively on reducing business costs.

AI Is Both an Economic Opportunity and a Labour-Market Challenge

The growing use of AI presents a complicated picture for the global economy. Businesses can use the technology to improve efficiency, develop new products and perform tasks more quickly. At the same time, workers may face uncertainty as employers redesign their operations.

The challenge is not simply to slow technological progress or encourage unrestricted automation. It is to develop policies and business practices that allow societies to benefit from innovation while managing its social and economic consequences.

Companies can help by retraining employees, creating new opportunities for junior workers and ensuring that productivity improvements support sustainable business growth.

Governments can contribute through education reform, digital infrastructure, labour-market protections and policies that encourage responsible innovation.

Workers, meanwhile, will increasingly need opportunities to update their skills throughout their careers.

The IMF’s warning that AI could affect approximately 40 per cent of jobs worldwide underscores the scale of the transformation facing the global economy.

Although AI investment is supporting economic activity and creating opportunities for innovation, its effects on employment, wages and inequality will depend on how the technology is introduced and how its benefits are distributed.

For Nigeria and other developing economies, the priority is to build the infrastructure, skills and policies needed to turn AI into an instrument of inclusive growth.

Ultimately, economic progress should be measured not only by GDP expansion or corporate profitability but also by whether people can find meaningful work, improve their living standards and participate in the opportunities created by technological change.

By Joseph Iyaji

Akahi News