AI could drive EU growth but risks widening economic inequality: IMF

The IMF cautioned EU ministers that the introduction of artificial intelligence into the bloc's economy would create both opportunities and challenges that could exacerbate existing disparities. While AI has the potential to enhance productivity and drive overall economic growth, the gains are expected to concentrate in certain countries and sectors, potentially leaving other regions and worker groups facing adjustment difficulties.

The fund's assessment highlights a critical concern for policymakers: the uneven geographical distribution of AI-related benefits across the European Union. Wealthier nations with advanced technology sectors and greater capacity for innovation are positioned to capture disproportionate gains, while less developed regions may struggle to keep pace with the rapid technological transition.

The labour market implications present another dimension of concern. The IMF's analysis suggests that AI adoption could displace workers in specific sectors and skill categories while creating new opportunities elsewhere. This transition poses particular risks for workers in traditional industries and those with limited access to retraining programmes.

The warning underscores the need for coordinated EU policy responses to manage AI's integration into the economy. Officials are being urged to consider how fiscal and social policies can help distribute the benefits more broadly and support workers and regions facing disruption from technological change.