World Bank President Ajay Banga said on Tuesday that capital remains available despite concerns about interest rates rising due to artificial intelligence.
“It doesn’t really matter,” Banga said in an interview on CNBC’s “Squawk Box.”
Banga said the World Bank mobilized $112 billion last year, nearly three times the amount recorded three years ago.
He said investors may be concerned about business models related to circular lending and AI.
But Banga told CNBC that emerging markets won’t have the same hesitation, as investments are focused on infrastructure such as bridges and roads.
These countries are also considering small-scale uses of AI, Banga said. Banga said developed countries look to funding to support large-scale use cases, but it’s the “exact opposite” need.
World Bank leaders also said that no private capital overseen by the bank would go to governments. As a result, organizations can avoid the fear of an impending debt crisis and the challenges associated with rising bond yields in some countries.
“In general, I still believe that AI will be transformative and profitable,” Banga said. “But everyone realizes there’s a bump in the road from here to there, but no one knows when the next bump will come.”
Banga’s comments came ahead of a series of interest rate decisions by central banks around the world. Economists and financial policymakers around the world are trying to gauge how the spread of AI will affect capital demand and employment.
Founded in 1944, the financial institution aims to end poverty and support economic prosperity through global partnerships and financing. Prior to taking the bank’s top job, Mr. Banga served as vice chairman of General Atlantic and CEO of General Atlantic. master card.
