IMF and OECD Warn AI Could Widen Global Inequality as Adoption Challenges Mount

AI Promises Growth But Threatens to Deepen Global Inequality

AI holds significant potential to boost global economic output, yet the IMF and OECD warn that this technology could widen the rich-poor country divide unless critical barriers are addressed1

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. Era Dabla-Norris, deputy director of the International Monetary Fund's Fiscal Affairs Department, emphasized that for developing economies, the critical question centers on whether they can adopt and diffuse AI effectively2

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. Access to reliable power, robust digital infrastructure, and skilled workers remains inadequate in poorer nations, creating significant obstacles to AI adoption that could leave these countries further behind.

Productivity Gains Fall Short of Expectations

The IMF estimates that effective AI adoption could add up to 0.5% to annual global growth over the medium term1

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. The Organisation for Economic Co-operation and Development projects even broader productivity gains, estimating AI could contribute 0.4% to 1.2% to annual productivity growth across member countries2

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. However, Dabla-Norris noted that aggregate productivity evidence so far shows much less impact than projected. OECD chief economist Stefano Scarpetta highlighted a troubling gap between potential and reality, observing that workplace adoption significantly trails consumer use, with only limited integration in core business functions1

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Job Displacement Accelerates as Companies Cut Costs

The economic and labor market implications of AI are already materializing through mass layoffs across major corporations. The IMF estimates that approximately 40% of jobs worldwide could be exposed to AI2

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. Barclays announced it was cutting around 5,000 jobs this year as it deploys AI-driven cost-cutting measures to reduce expenses and improve returns1

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. eBay is reportedly laying off 9% of its workforce, while Qualcomm is implementing a "performance-focused reduction" that will eliminate jobs globally2

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. These developments underscore how AI adoption is reshaping employment landscapes, particularly in developed economies where companies possess the resources to implement these technologies.

Younger Workers Vulnerable as Entry-Level Tasks Disappear

Dabla-Norris raised particular concerns about younger workers vulnerable to AI's displacement of entry-level tasks that traditionally serve as pathways for skill development and career advancement1

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. As AI increasingly automates routine functions through which employees gain experience, entry-level workers face diminished opportunities to build foundational skills. This trend threatens to create a generation of workers who lack the practical experience needed to advance in their careers. Smaller companies, which often provide these entry-level opportunities, face their own challenges in adopting AI due to limited resources and technical expertise, potentially exacerbating the inequality between large and small businesses2

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. The warnings come amid massive investment in chips and AI infrastructure that has supported global growth and driven stock markets to record highs, even as questions emerge about whether companies can generate sufficient returns on these commitments as borrowing costs rise1

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