Asia's Growth Vulnerable to AI-Related Demand, Amro Says

By Amanda Lee

Asian economies have remained solid so far despite the energy shock, but their outlook is particularly sensitive to artificial intelligence-related demand, the Asean+3 Macroeconomic Research Office said.

Such stronger-than-expected demand would further boost export and investment growth, but a potential AI-related slowdown could weigh heavily on the region's economy, Amro said Monday.

Renewed financial market volatility and more protectionist measures could also weigh on the regional economy, the research office added.

"The AI investment cycle is supporting a widening range of regional activities, although domestic demand remains uneven," Amro chief economist Dong He said.

Amro maintained its growth forecast for 2026 at 4.1% in its latest report, though it lifted its 2027 projection to 4.1% from 4.0% in July.

The "Asean+3" economies comprise 10 members of the Association of Southeast Asian Nations, plus China, Japan and South Korea.

Most economies in Asia have benefited from the continuing AI boom, even as the Strait of Hormuz remains closed and global geopolitical tensions continue. Exports have been a key driver of resilience, particularly in tech-heavy economies such as Korea.

Still, Amro warns that energy and food price shocks could weaken growth and push up inflation.

Asia remains exposed to volatile energy prices, given its reliance on imported oil, especially from the Middle East. Oil prices have continued to rise, driven by supply concerns and rising tensions in the Middle East.

El Nino, meanwhile, poses a threat to crop production. The weather phenomenon brings dry, hot conditions to the region that risk pushing food prices higher.

Amro kept its 2026 Asean+3 inflation forecast at 1.6% but raised its projection for 2027 to 1.7% from 1.6% previously.

It expects higher energy and transport costs as well as possible El Nino-related food price pressures to drive inflation next year.

Energy supplies and industrial input disruptions have proven to be less severe than feared, limiting the drag on production, He said. "However, higher energy and logistics costs continued to weigh on household purchasing power and business costs," the economist said.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

October 04, 2026 22:56 ET (02:56 GMT)