A new analysis from the International Monetary Fund (IMF) explores how artificial intelligence could influence Europe’s long-term economic performance. The IMF notes that AI is spreading more rapidly than previous digital technologies and has the potential to raise productivity by automating tasks and enhancing human work. Yet the scale of the gains will depend mainly on policy choices made today.
In the medium term, the IMF estimates that AI alone could raise productivity in Europe by about 1.1 per cent over five years, with wide variation across countries. Higher-income economies with larger white-collar sectors and higher wages are likely to see faster adoption and bigger gains. Lower-income economies may experience only modest initial improvements, risking wider productivity gaps within the region.
Over the longer term, the outlook could be far more significant. As AI systems become more capable, they may help create new industries, accelerate scientific research and generate new commercial knowledge. Evidence already shows potential benefits in areas such as pharmaceutical development. These effects could substantially lift annual productivity growth, although the timing and scale remain uncertain.
The IMF highlights several areas where European policymakers can act to maximise AI’s benefits:
- Deepen the single market
- Strengthen financing for innovation
- Support workers through the transition
- Ensure affordable, reliable energy
- Maintain flexible, adaptive regulation
Even moderate productivity improvements from AI would be meaningful for Europe’s current growth trajectory. Realising larger, longer-term benefits will depend on Europe’s ability to move quickly, integrate its markets and create an enabling environment for responsible AI innovation.
Additional links:
- Artificial intelligence – United Nations Western Europe
- UNRIC Library Backgrounder: Artificial Intelligence – Selected Online Resources – United Nations Western Europe
- Artificial intelligence and the future of work: Disruptions and opportunities
- AI in conflict: keeping humanity in control
- UN space agency: ‘space is not a distant dream’