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World Bank Expects East Asia and Pacific Econ Growth to Slow to 4.2% This Year
The World Bank Group released its East Asia and Pacific Economic Update report, noting that economic growth in the East Asia and Pacific region is slowing in 2026 due to external s...
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World Bank Expects East Asia and Pacific Econ Growth to Slow to 4.2% This Year
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The World Bank Group released its East Asia and Pacific Economic Update report, noting that economic growth in the East Asia and Pacific region is slowing in 2026 due to external shocks.

The report stated that China, as the regions largest economy, is facing weak domestic demand and ongoing challenges in the real estate sector, coupled with slower global growth weighing on export expansion. Its growth forecast is projected to ease from 5% last year to 4.2% in 2026 and 4.3% in 2027. Growth in other economies in the region is expected to slow to 4.1% in 2026, before rebounding to 5% in 2027 amid easing geopolitical tensions and reduced uncertainty.

Carlos Felipe Jaramillo, World Bank Vice President for East Asia and Pacific, said that even in uncertain times, economic growth in the region continues to outperform most parts of the world. However, to sustain growth momentum, countries must address structural challenges and seize opportunities in the digital era to enhance productivity and create jobs.

The report also noted that the impact of the Middle East conflict depends on each countrys reliance on energy imports, existing vulnerabilities and policy flexibility. A further escalation of the conflict could deepen economic difficulties and dampen regional growth. A sustained 50% increase in fuel prices could result in a 3% to 4% loss in household income across the region.

Aaditya Mattoo, Chief Economist of the World Bank Groups East Asia and Pacific region, said that while the regions past resilience has been remarkable, current challenges could intensify economic strains and restrain productivity growth. Providing appropriate support to households and businesses could help preserve existing jobs, while reviving stalled structural reforms could unlock future growth potential.

The report highlighted that a surge in artificial intelligence-related exports and investment was a bright spot in 2025, particularly in Malaysia, Thailand and Vietnam. Artificial intelligence could also drive higher productivity growth, but its adoption in the region remains limited due to gaps in connectivity and skills. Currently, only 13% to 17% of multinational subsidiaries in China and Thailand use artificial intelligence, about one-third of the level in industrialized economies.

2026 GDP Growth Forecasts:

Country/Region  October Last Year Forecast  April This Year Forecast

East Asia and Pacific  4.3  4.2
East Asia and Pacific (excluding China)  4.5  4.1

China  4.2  4.2
Indonesia  4.8  4.7
Malaysia  4.1  4.4
Philippines  5.4  3.7
Thailand  1.8  1.3
Vietnam  6.1  6.3
Cambodia  4.3  3.9

(hc/)



This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation.

Auto-translated by AI

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