IMF says AI investment boosts growth while adding inflation and debt risks

IMF Managing Director Kristalina Georgieva says AI investment is a key driver of countries' relative economic fortunes, and that AI could add up to half a percentage point to annual world growth if managed well.

She also warns the AI boom is inflationary and could widen inequality, and that high interest rates, soaring energy costs and record public debt strain governments. She urges policymakers to stop delaying painful debt decisions and to consider a prudently hawkish monetary stance.

Georgieva frames the economy as pulled two ways: a negative energy supply shock from the war in the Gulf, and a positive demand shock from AI investment. Separately, the IMF says AI infrastructure investment could raise growth in advanced Asian economies by up to one percentage point, with emerging Asian economies gaining nearly as much. JP Morgan's chief economist says Asia's expansion is broadening from a tech-led export boom toward more balanced growth.