IMF warns over 40% of educated youth in South Asia are jobless

Highly educated young people across Asia are struggling to find work that matches their qualifications, with unemployment rates among postsecondary-educated youth exceeding 40% in parts of South Asia, according to new research published by the International Monetary Fund.

The findings, contained in the September 2026 edition of the IMF's Finance & Development magazine, show that Sri Lanka records the highest rate among the Asian economies surveyed, with roughly 43% of people aged 15–24 holding postsecondary education unable to find employment. India follows closely at about 42%, while Bangladesh stands at approximately 36%.dhakatribune+2

A "Graduate Glut" Across the Region

The IMF described the pattern as a "graduate glut," noting that the gap between overall youth unemployment and unemployment among the most educated cohort is wide throughout the region. Sri Lanka's overall youth unemployment rate is around 22%, and India's is about 18% — already elevated, but far below the rates recorded for degree holders.tbsnews+1

Southeast Asian economies included in the comparison fare better in absolute terms but exhibit the same structural mismatch. Indonesia's educated youth unemployment rate is about 18%, Vietnam's roughly 16%, Malaysia's and Thailand's around 13%, and the Philippines' approximately 12%. Singapore records the lowest rate at about 8%.tbsnews

"Highly educated young workers are struggling to find positions that match their qualifications," Krishna Srinivasan, director of the IMF's Asia and Pacific Department, said.tbsnews

AI and the Erosion of Entry-Level Roles

The IMF warned that the rapid adoption of artificial intelligence is compounding the problem. AI models capable of performing complex tasks at little cost are increasingly replacing entry-level technical positions — junior engineers, animators, administrative staff — that have traditionally absorbed recent graduates. If AI adoption outpaces skills development, the technology could place further pressure on young workers already facing a constrained labor market.dhakatribune+1

A Demographic Wave Ahead

The report arrives against the backdrop of a historic demographic shift. The IMF estimates that nearly 1.2 billion people will enter the labor force in developing economies over the next decade, more than double the roughly 500 million who entered a half century ago. A World Bank report published in June, titled "The Global Jobs Challenge," noted that this cohort is likely to be the largest youth group in history, with numbers expected to surpass those of any previous or future decade this century.tvcnews+1

In Bangladesh, where about 2.2 to 2.3 million young people enter the labor market annually, the share of the workforce holding bachelor's degrees more than doubled between 2010 and 2022 — from 3.9% to 9% — while the country's economic structure changed little, according to Fahim Mashroor, founder of Bdjobs.com. The mismatch between credential supply and job demand leaves developing economies facing a dual challenge: absorbing a surging working-age population while ensuring graduates acquire skills that remain relevant as technology advances.dhakatribune+1