Sri Lanka, Oct. 14 -- A sharp reversal in artificial intelligence (AI) investment could leave Asia's economic output 1.7% below forecasts, the second-largest regional impact after the United States among the economies covered by the International Monetary Fund (IMF), the fund warned on Tuesday (13). It also cautioned that the AI boom driving global trade relies on supply chains concentrated in a small number of economies.

In a downside scenario outlined in its October 2026 World Economic Outlook (WEO), released during the IMF-World Bank Group Annual Meetings in Bangkok, the IMF assumes that anticipated productivity gains from AI fail to materialise. Under this scenario, AI investment unwinds, US equity prices fall by 20% in 2026 and shar...