IMF: AI Could Raise Europe’s Productivity, Deepen Strains

The IMF says the global economy has remained more resilient than expected, with growth near 3%, but stubborn inflation, rising debt-service costs and insufficient fiscal consolidation continue to pose risks. IMF Managing Director Kristalina Georgieva also warned that leveraged and concentrated financing of artificial-intelligence investment, particularly in the United States, could trigger broader shocks if AI-driven expectations disappoint. Separately, an IMF paper estimates that AI could raise European productivity by about 1% over five years, while warning that the gains may be distributed unevenly and could widen inequality or displace workers. About 60% of workers in advanced European economies are in occupations significantly exposed to AI, and expanding data centers could further strain electricity networks. The IMF urged the European Union to complete its single market, invest in cross-border energy infrastructure, support affected workers and develop domestic AI capacity to reduce dependence on U.S. and Chinese technology.