IMF Chief: AI Productivity Can Offset Labor Shortages Caused by Aging Populations in Korea, China, and Japan

IMF Managing Director Kristalina Georgieva projected on October 12 (local time) that productivity gains from the adoption of artificial intelligence (AI) could largely offset the impact of shrinking workforces driven by rapid population aging in major Asian countries such as South Korea, China, and Japan.

Georgieva made the remarks during a presentation unveiling a report on the Asian economy at the IMF-World Bank Annual Meetings held in Bangkok, Thailand.

She first pointed to "demographic shifts," "economic integration," and "AI-driven technological innovation" as the three major transitions currently facing Asia.

"If advanced economies in Asia facing deepening aging successfully achieve productivity growth through AI, they will be able to sufficiently offset the economic pressures caused by the demographic cliff," she said.

According to a report released by the IMF on this day, South Korea, China, and Japan are projected to lose about 25% of their working-age populations between now and 2050.

However, the report analyzed that enhancing work efficiency and boosting productivity utilizing AI technology can absorb the shock of such population losses.

At the same time, the IMF warned that economic disparities among Asian countries could widen further during the AI adoption process, urging policymakers to mount a balanced response.

Krishna Srinivasan, director of the IMF's Asia and Pacific Department, pointed out, "The key depends on whether AI is used to empower workers or simply replace jobs," adding, "Advanced economies have the foundations to reap the benefits of AI, while emerging nations lack the capacity to capture those advantages."

Georgieva also noted that massive investments in AI infrastructure are serving as a key driver propelling global economic growth to around 3% this year, with major Asian hardware suppliers benefiting from the trend.

"The surge in AI investments is triggering strong demand and investment shocks," Georgieva evaluated, adding, "AI investments are yielding growth-boosting effects of 0.5 to 1.0 percentage points for advanced Asian economies and 0.2 to 0.8 percentage points for emerging Asian economies."

She emphasized, "Even under circumstances where the global economy faces downward pressure from energy supply shocks (due to the war in Iran, the war in Ukraine, etc.), the fact that global growth is maintaining the 3% range is thanks to the AI sector," and added, "AI is already with us whether we like it or not."

Last month, the Organisation for Economic Co-operation and Development (OECD) raised its projection for South Korea's economic growth this year to 3.7%, lifting its forecast by 1.1 percentage points in three months.

At that time, the OECD projected that the spread of AI could act as an additional upward factor for the global economy in terms of investment and production.

In July, the IMF revised its projection for South Korea's real gross domestic product (GDP) growth this year to 2.6%.

This was an upward revision of 0.7 percentage points over three months compared to 1.9% in April.

The IMF's projected global economic growth rate for this year announced at the time was 3.0%.

The IMF is scheduled to release updated economic outlooks for South Korea and other countries around the world on October 13.

Comparing AI to a "slow-moving tsunami," Georgieva projected that AI will have a massive impact on jobs, growth, education, and tax revenues.

Georgieva explained that the IMF estimates over the long term, 40% of jobs worldwide could see their tasks complemented, their job levels downgraded, or disappear entirely due to AI.

In the case of the U.S. labor market, 10% of jobs already require AI skills, and a polarization phenomenon has been identified where repetitive tasks are decreasing while low-paying jobs in construction and data center sectors are actually increasing.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.