International Monetary Fund Managing Director Kristalina Georgieva said central banks should account for a possible AI-led growth slowdown as they confront inflation, with volatile markets adding another complication.
Speaking at the IMF’s Washington headquarters on Nov. 6, Georgieva said market swings were complicating policymakers’ work as risks to price stability increased. She said AI investment was helping sustain growth in some countries and cushioning an oil-supply shock linked to the war in the Middle East. At the same time, the boom was increasing inflationary pressure and financial-stability concerns.
“Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation,” Georgieva said.
In October, the IMF warned that a sharp pullback in AI investment could depress asset prices and leave global gross domestic product 1.1% lower by 2028, including a 1.8% decline in U.S. output. Georgieva did not repeat those projections on Nov. 6, but acknowledged recent volatility. The IMF’s concerns about a possible market correction were also covered in EconoTimes’ earlier story on AI financing and market-correction risks.
Reuters reported that doubts over returns from heavy spending on AI infrastructure had already made the trade vulnerable. The report said market losses prompted margin calls and unsettled retail investors and hedge funds.
Reuters linked the Nov. 5 technology-stock decline to investor concerns that Democrats’ midterm victory could bring tighter AI scrutiny and slow data-center construction. Investors moved toward bonds, the report said.
Reuters also reported, citing congressional aides and advocates, that Democrats plan legislation covering AI systems and data-center development when they take control of Congress in January. That would mark a shift from the Republican-led Congress, where lawmakers largely promoted AI development and did not pass restrictions on the technology, Reuters reported.
