The rapid expansion of artificial intelligence technologies is becoming a new source of inflationary pressure worldwide, IMF Managing Director Kristalina Georgieva said in a message on the fund’s website. The swift roll‑out of digital services requires vast amounts of electricity to power data centres. Rising energy demand is pushing up power costs, setting off a chain reaction of higher prices across goods and services.
Higher energy costs feed directly into the production of fertilisers, commodities, and food. Climate anomalies linked to El Niño, which threaten harvests, add to the price impulse. The combination of costly electricity and crop shocks is stoking inflation and weighing on global growth, although emergency reserves and efficiency gains have so far helped blunt the energy shock.
The IMF’s concern is shared by other central banks. The Bank of Japan has warned that AI development increases inflationary risks and may force policymakers to raise interest rates. Rapid expansion of computing infrastructure is outpacing grid capacity, forcing governments to balance support for the tech sector with the need to protect living standards.
