Lacklustre productivity growth could prolong high inflation and trigger a sharp slowdown in global economic activity, leading to a blowout in government spending and generating social unrest, the Bank for International Settlements says.

Economists at the Swiss-based BIS, a club of central banks, warned that governments worldwide could not rely on artificial intelligence to offset the various headwinds facing productivity growth, including an ageing population, increasing trade barriers, and a decline in political appetite for meaningful economic reform.