Global AI Hardware Demand Powers East Asia Growth Beyond World Bank Forecasts

The World Bank Group is projecting higher growth for several East Asia and Pacific (EAP) economies due to their involvement in manufacturing and exporting high-tech goods that support artificial intelligence (AI) development, according to a recent press release. The organization revised its growth forecast for 2026, raising it by 1.1 percentage points for Vietnam to 7.4%, by 0.7 percentage points for Malaysia to 5.1%, and by 0.7 percentage points for Thailand to 2.0%.

Pacific Island countries, however, are growing at a slower rate of 2.2%, which is 0.5 percentage points less than expected, due to high energy prices. China's growth stands at 4.4%, with domestic demand restrained by a soft labor market and adjustments in the property sector. Overall, the World Bank expects the EAP region to achieve a 4.5% growth rate this year.

Carlos Felipe Jaramillo, World Bank vice president for East Asia and Pacific, emphasized that the region's deep integration into global value chains and economic dynamism position it to benefit from the surge in global AI-related activity. However, the adoption of AI by individuals and firms in the EAP region lags behind that of advanced economies, largely due to concerns over high costs, expertise, security, and privacy.

To accelerate AI adoption across the economy and support small firms, countries in the region are urged to mobilize private capital for digital and energy infrastructure, expand financing for businesses, and invest in workforce skills, according to Sarvesh Suri, IFC regional vice president for Asia and the Pacific.