QNB anticipates AI driving US productivity growth

Doha, Qatar: QNB affirmed that the US economy is reaching an inflection point following a long period of weak productivity caused by chronic structura...

Doha, Qatar: QNB affirmed that the US economy is reaching an inflection point following a long period of weak productivity caused by chronic structural constraints, particularly following the rapid progress achieved in artificial intelligence applications, which have opened the way for a new growth cycle that could be more sustainable.

In its weekly report, the bank noted that the impact of this transformation will not be limited to the United States alone, as its benefits are expected to extend to other economies, particularly in Asia and the Middle East. These regions have strengthened their investments in supply chains and artificial intelligence technologies, while the declining cost of adopting such technologies is accelerating their global diffusion, thereby enhancing the prospects for a tangible boost to global economic growth over the medium term.

The report noted that productivity growth is the most important driver of long-term economic prosperity, as it determines the appropriate pace of economic growth without increasing inflation, the speed at which living standards improve, and the sustainability of wage growth.

In this context, it pointed out that productivity growth in the United States has experienced significant fluctuations throughout most of the post-World War II period, with long phases of high productivity growth followed by extended periods of decline.

The report highlighted that the average labor productivity growth reached around 3 percent annually in the decades that followed. Over time, a noticeable slowdown emerged until the wave of internet and e-commerce innovations in the mid-1990s and early 2000s. However, the global financial crisis that began in 2007 hindered that momentum, leading to a prolonged period of weak productivity up until just before the COVID-19 pandemic.