IMF Sees Asia Growth Slowing as Market Risks Build
The Fund projects slower regional growth in 2027 and warns that energy costs, AI demand and rising bond yields pose risks.
Key takeaways
- The IMF projects Asia’s growth will slow to 4.4% in 2027 from 4.8% in 2026.
- The Fund warns that energy shocks, an AI correction and rising global yields could weigh on the region.
The International Monetary Fund expects Asia’s economy to grow 4.8% in 2026 and 4.4% in 2027, down from 5.0% in 2025. The projections, released Thursday in Bangkok, are higher than the Fund’s April forecasts but point to slower growth next year.
The IMF said the boost from the AI boom is lifting growth prospects for advanced Asian economies. Emerging Asia is expected to remain the region’s main growth engine, though its growth is projected to ease to 5.1% in 2026 from 5.6% in 2025, partly because of higher energy prices.
The Fund warned that a prolonged Middle East conflict could keep commodity prices high and deplete oil reserves. A correction in AI demand could also hit global growth, with effects particularly pronounced in Asia because of the region’s exposure to the AI production chain.
Rising global bond yields could spill over into Asian bond markets, while uncertainty over US monetary policy may keep financial markets volatile. The IMF said higher borrowing costs could strain public finances across a region where debt and financing needs remain high.
The Fund urged Asian central banks to focus on price stability and respond promptly if inflation pressures persist. It also called for targeted, temporary fiscal measures and warned against blanket fuel subsidies or price controls.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
