IMF chief warns AI could weaken employment and tax revenues

Kristalina Georgieva urged governments to rethink education and prepare for changes in work as artificial intelligence shifts income from labour towards capital.

Speaking at the IMF and World Bank annual meetings in Bangkok on October 12, Georgieva said automation was reducing demand for workers performing routine tasks. She also pointed to growth in lower-paid employment, including construction, rather than treating every new job as evidence of broadly shared gains.

Her warning extends to public finances. If a larger share of economic income flows to capital instead of workers, governments that rely heavily on taxing labour could see their revenue base come under pressure.

Georgieva urged policymakers to monitor developments and act on what they learn, while acknowledging that the shape of employment several years ahead remains uncertain. Her remarks were a call for adaptation rather than an announcement of a new tax measure.

She also highlighted potential gains. The IMF estimates that wider adoption of AI could add up to a percentage point to growth in advanced Asian economies. Georgieva said that potential boost could more than offset the drag from ageing in the region's richer countries. The estimate describes a possible benefit, not growth already achieved.