IMF Warns AI Slowdown Could Cut Global GDP 0.4pc by 2028

Quick Answer: The IMF says a decline in AI investment could reduce global GDP by 0.4 per cent by 2028. The warning came at the IMF-World Bank Annual Meetings in Bangkok on Oct 17. The source article names no Bursa Malaysia company, so the risk for local shareholders depends on how much revenue each company earns from data centre and microchip spending.

The IMF AI slowdown warning comes from a boom that has done much of the heavy lifting for global growth. Experts at the IMF-World Bank Annual Meetings in Bangkok said the AI boom is a key driver of growth, but it also carries risk if investment falters.

How Much Could an IMF AI Slowdown Cut From Global GDP?

IMF says AI slowdown could knock 0.4pc off global GDP by 2028 — The IMF projects a fall in AI investment could cut global GDP by 0.4 per cent by 2028.

An IMF report released this week projected that a decline in AI investment could reduce global GDP by 0.4 per cent by 2028. Spending on data centres and microchips has cushioned the economic shock of rising energy prices caused by war in the Middle East.

IMF chief economist Silvana Tenreyro said global trade rose 8.3 per cent between 2023 and 2025. Without AI-related products, she said that figure would be closer to 4.6 per cent.

Why Are Top Officials Warning Against Relying on AI?

Federal Reserve Chair Kevin Warsh called AI the “most consequential change” to the global economy in his lifetime. He said it had “a huge benefit”, but warned the road ahead would be “bumpy”.

IMF chief Kristalina Georgieva said any slowdown in the industry “would be felt across the world”. She added: “If there is loss of confidence and money runs away from AI, that can lead to financial stability risks.”

Bank of Canada Governor Tiff Macklem said AI is “everywhere in the global economy”. He pointed to GDP, the stock market and the bond market as places where it shows up.

Could the Middle East War Puncture the AI Boom?

Moody’s Analytics warned that if the Middle East conflict drags on, it could “puncture” the boom. Higher energy prices and tighter financial conditions could push up operating costs and interest rates.

Moody’s Analytics said doubts are growing over “the long-term profitability and viability of AI business models”. It added: “A drawn-out conflict would put serious strain on the economics behind AI investment.”

What Regulation Risk Does the IMF Flag for AI Stocks?

US President Donald Trump has urged more limited government regulation. Some in the industry have called for legislation to mitigate risks.

The IMF report warned that “Weaker or less durable AI investments and profitability could be a shock that triggers a market correction.” Georgieva added: “If there are no safeguards, then the risks may exceed the opportunities.”

Where Does Bursa Malaysia Fit in the AI Slowdown Story?

The source does not name any Bursa-listed company or cite a Malaysian AI figure. The link to Bursa is therefore indirect, and investors will need to trace it company by company.

Companies whose order books depend on data centre or microchip spending are worth monitoring. Check their order book size, profit margins and gearing in their latest Bursa filings. Read more about AI Stock Analysis for Malaysians to see how screening tools approach this.

Key Takeaways

The IMF projects a fall in AI investment could cut global GDP by 0.4 per cent by 2028.
Global trade rose 8.3 per cent between 2023 and 2025, versus an estimated 4.6 per cent without AI-related products.
Moody’s Analytics warns a prolonged Middle East conflict could strain AI business economics.
Regulatory uncertainty and “bumpy” market understanding remain open risks, according to Kevin Warsh and the IMF.
The source names no Bursa Malaysia company, so company-level exposure needs checking in filings.

Frequently Asked Questions

How much could an AI slowdown reduce global GDP?

The IMF projected that a decline in AI investment could reduce global GDP by 0.4 per cent by 2028. The projection comes from an IMF report released at the Bangkok meetings.

How much has AI boosted global trade?

IMF chief economist Silvana Tenreyro said global trade rose 8.3 per cent between 2023 and 2025. She said the figure would be closer to 4.6 per cent without AI-related products.

Does the IMF AI slowdown affect Bursa Malaysia stocks?

The source article does not name any Bursa Malaysia company. Investors can check whether a company’s revenue depends on data centre or microchip spending in its latest filings.

Did the IMF say an AI slowdown will happen?

No. The IMF report projected the impact if AI investment declines, and the source does not forecast a decline.

Disclaimer: This article is for general information only and is not investment advice or a recommendation to buy, sell or hold any security. Do your own research before making any investment decision.

Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.