World Bank Lifts East Asia Growth Forecast to 4.5% on AI Export Demand

The World Bank released its East Asia and Pacific Economic Update on October 6, 2026, raising its regional growth forecast to 4.5%. This represents an increase of 0.3 percentage points from the lender's previous estimate.

The upward revision is largely attributed to economies that export components for AI infrastructure, such as chips and electronics. Vietnam saw the most significant adjustment, with its growth forecast rising 1.1 percentage points to 7.4%. Malaysia and Thailand also received upgrades, with their projections increasing by 0.7 percentage points to 5.1% and 2.0%, respectively.

The report notes that over 70% of export growth in Vietnam, Malaysia, Thailand, and the Philippines is tied to AI-related products. However, the World Bank cautioned that this concentration creates a vulnerability, as these economies could face significant downside if global AI spending cools.

Other regional economies saw different results. China’s growth is projected at 4.4%, impacted by property sector issues and a weak labor market. The Philippines remained at 3.7%, while the outlook for Pacific Island nations was downgraded to 2.2%.

Beyond AI-related risks, the World Bank identified high energy prices stemming from geopolitical tensions in the Middle East and agricultural damage from the El Niño weather pattern as additional threats to regional growth.

The report also highlighted a disparity between the region's role as a hardware supplier and its internal adoption of AI tools. Businesses in the region face barriers including high costs, a shortage of skilled labor, and security and privacy concerns.

The ASEAN+3 Macroeconomic Research Office (AMRO) also recently weighed in, maintaining a 4.1% growth outlook for the ASEAN+3 region for 2026 to 2027. AMRO noted that a potential slowdown in AI-related activity could reduce growth by as much as 1.5 percentage points.