The International Monetary Fund highlighted the impact of higher energy prices, trends in AI demand and the risk of spillovers from rising global interest rates as factors that could slow Asia's growth outlook from next year onward.
According to the Asia-Pacific outlook released in Bangkok, growth is expected to slow to 4.8% in 2026 and 4.4% in 2027, down from 5.0% growth in 2025. The main factors cited include persistently high energy prices and the possibility that the AI boom's contribution to growth will diminish.
The contribution from high-growth economies driven by the AI boom is expected to increase to 3.2% in 2026, while growth in emerging Asia, which is exposed to energy prices, is expected to slow to 5.1% in 2026 from 5.6% the previous year, the IMF said.
Uncertainty over the direction of US monetary policy could increase market volatility, while there are concerns that rising global interest rates could spill over into Asian government bond markets and increase fiscal burdens.
The IMF called on central banks to continue prioritizing price stability in policymaking and to curb excessive expansion in fiscal spending. It also suggested avoiding the blanket introduction of energy subsidies.