ASEAN+3 Growth Forecast Raised Due to Strong AI Demand
The ASEAN+3 region is expected to grow by 4.1 percent in 2026, up from the previous forecast of 4.0 percent, according to AMRO's July 2026 Quarterly Update on the Regional Economic Outlook (AREO). The improved outlook is driven by strong demand for semiconductors and AI-related products, alongside lower global commodity prices that have helped reduce headline inflation projections to 1.6 percent in 2026. AMRO Chief Economist Dong He highlighted the region's resilience due to firm domestic demand and its central role in global AI supply chains. However, risks remain from potential escalations in the Middle East conflict or a slowdown in technology investment, which could significantly impact growth by as much as slowing it down to 2.5 percent in 2027 if global tech spending reverts to 2024 levels. The report also warns of uncertainties such as financial market volatility and rising trade protectionism that may affect the outlook. Policymakers are urged to remain vigilant and flexible, adapting macroeconomic strategies to evolving domestic conditions and external risks.
Topics: AI supply chains ASEAN+3 growth forecast inflation outlook semiconductors