IMF Chief Calls AI a Slow-Moving Tsunami for Jobs and Taxes

BANGKOK - Policymakers have stopped debating whether artificial intelligence will hit jobs and started arguing about how to cushion the blow. At the IMF and World Bank annual meetings in Bangkok on Monday, IMF Managing Director Kristalina Georgieva described AI's impact on the global labor market as "a slow-moving tsunami, but a tsunami nonetheless."

What happened

Georgieva said AI is projected to eventually "augment, downgrade or eliminate" roughly 40% of jobs worldwide. Exposure sits near 60% in advanced economies and 23% in low-income countries - and she noted the lower figure is not good news, it simply means "AI is further away."

Her focus was the entry level: young graduates who would normally take routine, repetitive roles and climb the ranks from there. "People to worry about, first and foremost, [are] young people that are coming into the labor market," she said. "If they're gone, I don't think any young person wants to be a barista in a coffee shop as a professional future."

Speaking on the same panel, Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank's Jobs Council, called for pandemic-style "crisis-era" employment support to become a permanent structural policy rather than an emergency tool. He said demand for US graduates has gone down "for the first time in a century."

Why it matters

The warning reframes the debate for anyone building with AI. AI investment is doing double duty: keeping global growth near 3% while rewriting the entry-level job market. Georgieva estimated adoption could add 0.5 to 1 percentage point to growth in advanced Asia, more than offsetting losses from aging populations. Shanmugaratnam cautioned that growth does not automatically create jobs: China, India and developing Southeast Asia "growing quite well, but job creation is weak."

The tax angle is the part technical teams should watch most closely. As AI absorbs routine work, the payroll and income taxes that fund public services shrink, while the compute and capital investment replacing labor is taxed through a different base entirely. Georgieva urged policymakers to rethink education and tax systems now rather than after displacement lands, arguing the shift will arrive "task by task" and that gap gives time to adapt.

World Bank President Ajay Banga added the demographic counterweight: about 1.2 billion young people will turn 18 over the next 15 years, and the private sector, which already generates 75% to 85% of jobs, will have to absorb most of them. Governments, he argued, should "de-risk" private capital rather than try to create the jobs directly.

Builder impact

For AI builders, the practical takeaway is that the deployment timeline is now a policy variable, not just a product one. Expect more governments to attach hiring incentives, retraining mandates and tax adjustments to enterprise AI rollouts. Teams shipping agents that replace routine entry-level work should document the tasks they automate and the roles they create - that evidence will increasingly be requested in procurement, compliance and public-sector deals. The growth figures also cut the other way: AI is currently the main thing holding global expansion together, which means the capital flowing into infrastructure is unlikely to slow soon.