The Bank for International Settlements published BIS Bulletin No 121 analysing how artificial intelligence, particularly generative AI, may affect productivity, growth and labour markets in emerging market economies. It concludes that the macroeconomic effects are likely to vary widely across countries, with advanced economies generally better positioned to capture near-term gains, and outcomes in emerging markets strongly shaped by sectoral composition and “AI preparedness” in infrastructure, skills and institutions. The bulletin cites micro evidence of sizeable task-level productivity gains from generative AI of 10–65%, with larger improvements for less experienced workers in some settings, while noting that estimates of economy-wide total factor productivity gains range widely from 0.07% to around 0.3–0.9 percentage points per year. It argues that many EMEs may see smaller near-term benefits because their output is more concentrated in lower-exposure sectors such as agriculture, transport and construction, and because AI readiness is uneven across EMEs, particularly in human capital and regulatory preparedness as captured by the International Monetary Fund’s AI Preparedness Index. In the short run, a standardised increase in AI preparedness is associated with a larger boost to real value added growth in advanced economies (0.6 percentage points on average) than in EMEs (0.45 percentage points), while employment effects remain uncertain amid higher exposure of low-skill cognitive and clerical work to automation and early evidence of negative impacts in some call centre and business process outsourcing activities. Longer-run simulations suggest that if AI raises total factor productivity by 0.5% per year for a decade and preparedness gaps persist, average real GDP in advanced economies increases by more than 2 percentage points relative to emerging market and developing economies, while partial convergence that halves preparedness gaps relative to the United States reduces the differential to less than 1 percentage point. The analysis also flags that trade and supply-chain linkages can materially shift the distribution of gains across countries.
Bank for International Settlements 2026-02-17
Bank for International Settlements publishes research on how AI preparedness shapes productivity gains in emerging market economies
BIS Bulletin No 121 examines AI's impact on productivity, growth, and labor markets in emerging economies. Advanced economies are better positioned for near-term gains, while emerging markets may see smaller benefits due to sectoral composition and uneven AI readiness. AI could boost productivity, but employment effects are uncertain, with potential negative impacts on low-skill jobs.