Artificial intelligence is emerging as a decisive force in shaping the next phase of global economic growth, but the transition may come with deep structural disruptions. Speaking at the India AI Impact Summit on February 20, IMF Managing Director Kristalina Georgieva underscored both the transformative upside and the systemic risks associated with rapid AI deployment.

According to Georgieva, AI adoption could raise global growth by about 0.8 percentage points, potentially pushing expansion above pre pandemic trends. For a world economy still grappling with slow productivity gains and uneven recovery from pandemic era shocks, such an increase would represent a material structural boost rather than a cyclical improvement. Her remarks come at a time when governments worldwide are competing to build AI ecosystems spanning infrastructure, talent, and regulatory frameworks.

The IMF chief stressed that countries that move quickly on digital adoption and skill development are likely to capture disproportionate gains. This places emerging economies at a crossroads: those able to upgrade education systems and digital capacity could leapfrog stages of development, while laggards risk falling further behind.

For India, the message carries particular significance. The country’s “Viksit Bharat” ambition a long term vision to become a developed economy hinges on sustained high growth, productivity expansion, and job creation. Georgieva indicated that India’s investments in digital public infrastructure and its young, technology receptive population could provide a relative advantage. Platforms such as Aadhaar, UPI, and digital service delivery networks have already created a scalable backbone for technology driven growth, positioning India differently from many peers.

However, the labour market implications could be far more complex than the headline growth numbers suggest. Georgieva described the potential disruption as “tsunami like,” estimating that around 40 percent of jobs in emerging markets and up to 60 percent in advanced economies could be affected in some way. The impact may not necessarily be outright job destruction but rather job transformation automation of tasks, changes in skill requirements, and wage polarization.

While she maintained that the overall employment effect of AI would be positive, she warned of uneven distribution. A smaller segment of workers may capture high productivity, high wage opportunities, while a large share of the workforce could face lower paying roles or precarious employment conditions. This pattern mirrors previous technological revolutions but may unfold faster due to the scale and speed of AI deployment.

Education and skill development emerged as central policy priorities in her remarks. Georgieva argued that education systems must be redesigned to reflect the needs of an AI driven economy, emphasizing digital literacy, adaptability, and lifelong learning. Without such reforms, productivity gains could coexist with rising inequality a combination that often triggers political and social backlash.

Financial stability risks also surfaced as a concern. Rapid technological change can amplify market volatility, concentration risks in dominant technology firms, and vulnerabilities in financial systems that rely heavily on automated decision making. Although no specific risks were detailed, policymakers globally are already examining issues such as algorithmic trading stability, cyber threats, and systemic dependence on large technology providers.

Georgieva cautioned that governments should assess AI adoption honestly, including failures, to avoid public resistance similar to the backlash against globalization in many countries over the past two decades. That period saw strong aggregate growth but uneven distribution of benefits, leading to political shifts and protectionist policies.

From a macroeconomic perspective, AI driven productivity gains could ease some structural constraints facing economies, including ageing populations in advanced countries and slowing labour force growth. For India, the opportunity lies in using AI to boost manufacturing efficiency, modernize services, and enhance public administration. At the same time, large scale workforce reskilling will be essential to prevent social dislocation.