The International Monetary Fund (IMF) forecasts significant benefits for the UK from the artificial intelligence (AI) revolution. According to its World Economic Outlook released on Tuesday, AI could enhance productivity by 0.9% to 1.5% annually. This boost might pull Britain’s economy out of its prolonged stagnation. Notably, this is much higher than the 0.1% to 0.8% annual productivity increase predicted for the global economy.
The IMF estimates that AI could increase the UK’s economic size by up to 16%, primarily within the first decade. However, the benefits will be uneven. Low-income workers might see a 2% rise in wages, while high-income employees could experience a 14% increase.
Implications for the UK Economy
The UK has faced one of the most severe productivity slowdowns among developed nations in recent decades. This slowdown impacts the government’s revenue, hampers business growth, and limits wage increases. Nonetheless, the UK’s strong digital infrastructure, skilled workforce, innovation ecosystem, and regulatory framework position it well to capitalize on AI advancements.
In contrast, many emerging markets and developing economies lag in AI readiness. The IMF notes that potential gains in these regions may be less than half of those projected for the UK. This disparity is largely due to fewer workers in high-exposure and high-complementarity occupations.
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