Home » AI set to fuel UK economic growth by 16%, IMF forecasts

AI set to fuel UK economic growth by 16%, IMF forecasts

by Simon Jones Tech Reporter
23rd Apr 24 11:47 am

The UK economy could grow as much as 16 per cent due to the impact of artificial intelligence (AI) on productivity and output, the International Monetary Fund (IMF) has forecasted.

In the IMF’s latest World Economic Outlook, AI was predicted to increased productivity by 0.9 to 1.5 per cent each year, putting the UK in a prime position to benefit from the AI revolution due to its “robust digital infrastructure, skilled labour force, innovative ecosystem, and regulatory framework.”

In contrast, AI’s impact is only projected to boost global productivity by 0.1 to 0.8 per cent.

IMF analysts predicted that the rollout of artificial intelligence could boost short term investment as firms allocate more resources to integrate innovative tools and refine production processes.

While in the medium term, it said AI could raise worker productivity and incomes, contributing to overall economic growth, although it could also cause job displacement and inequality.

Analysts found that 60 per cent of workers could be impacted by AI, with half of those expected to achieve higher productivity and consequently higher income, with the other half seeing lower demand for their labour and lower wages. That contrasts with only 40 per cent of jobs being impacted in emerging market economies and 26 per cent in low-income countries.

Roman Kucera, Chief Technology Officer at Ataccama, said, “The IMF’s forecast for the UK indicates that significant economic potential can be generated from adopting AI sooner rather than later.

“On the back of last week’s news that the UK government is reviewing its approach to AI regulation, care is needed to develop the necessary governance without throttling the opportunity.

“The government should map the required stages to get the country AI-ready, from ensuring data quality to feed Large Language Models, data governance and regulation, to enable UK businesses to take advantage of this once-in-a-generation disruptive technology safely and confidently.”

Sachin Agrawal, UK Managing Director at Zoho, added, “AI has an important role to play in the growth of the UK economy, arming the business ecosystem with tools to improve productivity and efficiency to help drive growth.

“Recent investment from the government and international collaboration with the US have positioned the UK to soar in AI innovation and the business community is in the perfect position to benefit as a result.

“AI is already central to some businesses in areas such as data analysis, forecasting and customer experience to enhance daily operations. But to truly maximise the benefits of AI, ensuring its development and use are governed by trust and safety is paramount.

“Implementing safeguards to protect training data, to give one example, can help mitigate the risks of AI and allow businesses to confidently adopt AI solutions, all with the aim of fostering business growth.”

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