AI could help solve Asia's aging problem, says IMF
What's the story
The International Monetary Fund (IMF) has said that artificial intelligence (AI) could help solve the problem of an aging population in Asia. IMF Managing Director Kristalina Georgieva made this statement during the launch of an IMF book on challenges and opportunities in Asia. She said, "AI is projected to lift up growth in advanced Asia...somewhere between half a percentage and one percentage point."
Workforce impact
Productivity gains from AI could offset demographic decline
The book's findings indicate that countries like China, Japan, and South Korea could see their working-age population shrink by nearly 25% by 2050.
However, productivity gains from AI could help offset this decline.
Krishna Srinivasan, Director of the IMF's Asia and Pacific department, warned that policymakers need to weigh the benefits of AI adoption against the risk of widening disparities between advanced and emerging economies.
Job dynamics
Disparities between advanced and emerging economies
Srinivasan emphasized the importance of whether AI augments workers or automates jobs.
He said advanced economies are more exposed to these changes but are also better positioned to benefit from them.
Emerging markets may be less exposed but also less able to capture the upside of AI adoption.
"The good news here is reforms that raise skills and productivity can bring adoption forward by a decade or more," Srinivasan added.
Economic growth
Regional trade agreements can also boost GDP
Meanwhile, Georgieva also highlighted that deeper regional trade agreements and reducing non-tariff barriers could increase Asia's GDP by about 1.8% in the long run.
The message is clear: technology combined with cooperation can help address major demographic challenges facing the region.
This was part of an annual meeting of the IMF and World Bank in Bangkok, where these findings were presented.