Economic impact of AI in emerging market economies

Leonardo Gambacorta, Enisse Kharroubi, Aaron Mehrotra and Livia Pancotto

No 121, BIS Bulletins from Bank for International Settlements

Abstract: The productivity and growth effects of artificial intelligence (AI) vary widely across countries, reflecting differences in sectoral composition and in the capacity to adopt and deploy AI. While advanced economies (AEs) are generally better positioned to reap the benefits of AI in the near term, substantial heterogeneity exists within emerging market economies (EMEs). AI preparedness – covering digital infrastructure, skills and institutional capacity – is a key determinant of overall gains, amplifying productivity effects where it is strong and constraining them where gaps persist, particularly in many EMEs. Closing AI preparedness gaps can support long-term convergence, as stronger infrastructure, human capital and institutions would enable EMEs to harness AI more effectively, help mitigate labour market risks through reskilling and retraining policies, and narrow growth differences with AEs.

Pages: 8 pages
Date: 2026-02-17
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