IMF warns Asia-Pacific workers face skills gaps as AI reshapes hiring

Asia-Pacific economies need to prepare their workforces for artificial intelligence, the International Monetary Fund said on Thursday, warning that the technology boom supporting regional growth is also exposing weaknesses in labor markets. The fund released its Regional Economic Outlook: Asia and Pacific at the annual meetings of the IMF and the World Bank in Bangkok, projecting regional growth of 4.8 percent on strong global demand for semiconductors and AI infrastructure.

Growth alongside labor strains

The report says AI could deepen underemployment and skills mismatches over the longer term. It notes that AI is reshaping occupations and changing which skills those roles require, and it calls on policymakers across the region to encourage high-quality job creation, support workers in gaining relevant skills and make it easier for labor to move between roles and countries.

Krishna Srinivasan, director of the IMF's Asia and Pacific department, said at a briefing during the launch that tackling youth unemployment and skills mismatches while supporting AI adoption is among the structural reforms the region needs. He said hiring in jobs more exposed to AI has been affected negatively, with employer demand down 10 percent.

Srinivasan added that the decline has stabilized even as AI capabilities have increased. That pattern, he said, suggests the technology is reshaping work more than eliminating it, as employers seek workers who have AI skills. The report draws on an analysis of 40 million online job postings across 19 Asian economies, covering low-income, emerging and developed markets, with monthly data through April 2026.

What the data shows for workers

The fund's assessment points to a shift in what employers want rather than a simple reduction in headcount. Companies that adopt AI and advertise for workers with AI skills have seen overall labor demand rise faster than firms that have not, the report found. It also identifies growing demand for newer roles such as prompt engineering and building AI agents.

The report highlights structural pressures that predate the AI boom. Export-led manufacturing helped Asia grow quickly, keep unemployment low and lift hundreds of millions of people out of poverty, but that job-creation path is becoming harder as factories use more machinery and trade fragmentation makes access to foreign markets less predictable.

Unemployment in Asia is lower than in almost any other region, the IMF said, but the headline figure hides youth joblessness and underemployment. Formal contracts remain the exception in many parts of the region, and informal work, often in agriculture, offers little security. In some emerging markets, unemployment among university graduates approaches 30 percent, and in the Philippines nearly 70 percent of graduates work in jobs that do not require a degree.

The report also flags slow adjustment. Workers in Asia move between occupations at a rate of only about 5 percent a year, which limits how quickly people can shift into roles where skills demand is rising. The IMF's AI Preparedness Index, which assesses digital infrastructure, human capital, labor market policies, innovation, economic integration, and regulation and ethics, shows wide differences in how well individual countries are placed to manage the transition.

What to watch next

For ASEAN members, Srinivasan said the priority is to harness human capital by upskilling the workforce and ensuring education systems support lifelong learning. Malaysia and Singapore are deeply embedded in the global AI supply chain and are among the main beneficiaries of the boom, which gives their training systems added importance for the wider region.

The IMF also points to risks for emerging markets with young populations, where AI could make it harder to follow the industrial and services route to economic development. Economists will be watching whether the recent stabilization in hiring holds as AI systems become more capable, and whether governments follow through on training and labor mobility measures.