AI investment boosts growth prospects for Asian economies: IMF

Strong investment in artificial intelligence infrastructure is helping sustain global economic growth at around 3%, offsetting some of the drag from an energy supply shock and benefiting Asian economies that supply hardware, including Thailand, International Monetary Fund Managing Director Kristalina Georgieva said, according to a report by Reuters.

The AI investment boom is providing a significant boost to economic activity, with the impact extending beyond advanced economies to emerging markets across Asia, Georgieva said at the IMF and World Bank annual meetings in Bangkok.

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The investment surge could lift growth in advanced regional economies by 0.5 to 1 percentage point, while emerging Asian economies could see gains of 0.2 to 0.8 percentage point, she said.

The acceleration in AI-related spending is helping the world economy maintain growth of around 3% despite the adverse impact of disruptions to energy supplies, Georgieva said.

Asian economies are among the major beneficiaries of the boom because of their role in supplying the hardware and other components required to build AI infrastructure. Thailand and other regional economies could benefit from stronger demand for technology-related products as companies worldwide expand their AI capabilities, the report stated.

The outlook, however, remains subject to risks from energy supply disruptions, which could weigh on economic activity and complicate the global growth outlook.

The surge in AI spending has emerged as an important source of support for the global economy at a time when geopolitical tensions and energy market disruptions threaten to weaken growth. Investment in data centres, advanced semiconductors and related infrastructure is generating demand across technology supply chains, creating opportunities for economies with established manufacturing capabilities.

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For Asian economies, the scale and duration of the AI investment cycle will determine the longer-term benefits. While higher demand for hardware and technology components could support exports and industrial activity, the region remains exposed to energy-price volatility and uncertainty about the global economic outlook.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)