IMF update

 

Dear MARIA,   In today’s edition, we highlight: Global Economy Weathers Tariff Shock World Economic Forum: AI Power Play, No Referees   F&D: Inside the AI-Led Resource Race Podcast: How Do You Measure the Economy GLOBAL ECONOMY Global Economy Weathers Tariff Shock Amid Tech-Driven Boom “Global growth has been impressively resilient amid trade disruptions, but this masks underlying fragilities tied to the concentration of investment in the tech sector,” wrote the IMF’s Pierre-Olivier Gourinchas and Tobias Adrian in a blog.   According to the IMF's latest projections, global growth will hold steady at 3.3 percent this year, an upward revision of 0.2 percentage points compared to October estimates, with most of the improvement accounted for by the United States and China.   A major driver has been the surge in IT investment—especially in AI—which is boosting overall business investment and activity. While this boom has been concentrated in the U.S., it is also generating positive spillovers globally, most notably in Asia’s technology exports.   At the same time, economies are facing major risks. Investment and market optimism are increasingly focused on the tech sector, raising concerns about leverage, asset valuations, and the potential fallout if returns disappoint or financial conditions tighten. In addition, “the negative growth effects of trade disruptions are likely to build up over time,” they noted. Read the Blog WORLD ECONOMIC FORUM 2026 AI Power Play, No Referees   A tsunami is hitting the labor market, said the IMF's Managing Director Kristalina Georgieva, speaking at the World Economic Forum's annual meeting in Davos. "Even in the best prepared countries, I don't think we are prepared enough," she added.     The panel discussion, which focused on how AI is reshaping the global economy, also featured Microsoft President Brad Smith, Saudi Arabia's Investment Minister Khalid Al-Falih, and India's Minister of Electronics and Information Technology Ashwini Vaishnaw.     Georgieva highlighted IMF research, which shows that 40 percent of jobs are already affected (negatively and positively). "AI is quickly reshaping economies. Some roles grow; others disappear. We must invest in skills and prepare communities," she noted.    According to Microsoft data, "generative AI is used by 25 percent of the population in the global North, but only 14 percent in the global South, and the gap is getting wider," said Smith. He also emphasized that AI will only close the global digital divide if we embark on building infrastructure across the global South.   The panelists agreed that governments need to invest more in upskilling people across the globe. For every one data scientist in Africa, there are 14 in Europe. Watch the Discussion F&D MAGAZINE Inside the AI-Led Resource Race (Credit:Getty Images/Bloomberg) Artificial intelligence is often cast as a technology that lives in the cloud and thinks in code. But behind every chatbot or image generator lie servers that draw electricity, cooling systems that consume water, chips that rely on fragile supply chains, and minerals dug from the earth, Thijs Van de Graaf writes in F&D.   The largest data centers have power needs in the tens of megawatts, at the scale of a small city. Amazon, Microsoft, Google, and Meta already run hundreds worldwide, but the next wave is far larger, with projects at gigawatt scale.   “The contest in algorithms is just as much a competition for energy, land, water, semiconductors, and minerals,” Van de Graaf writes. “Supplies of electricity and chips will determine how fast the AI revolution moves and which countries and companies will control it.” Read the Article PODCAST   The Economy - How Do You Measure That?  When Jim Tebrake sat down with IMF Chief Statistician Bert Kroese, he started with a seemingly simple question: how do we measure the economy? They discussed how economic statistics, such as GDP and inflation, are estimated; why these numbers are not simple counts; and why understanding how data are constructed is essential for interpreting them correctly.   This is the first episode of The Economy—How Do You Measure That? It explores how statisticians and economists measure economic activity as economies evolve. Watch Here Thank you very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.  Noha Elbadawy  Editor | IMF Weekend Read   nelbadawy@IMF.org Stay connected with the International Monetary Fund:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431