{
  "id": 14675862,
  "title": "IMF projects Asia-Pacific expansion easing through 2027",
  "url": "https://urgent.news/2026/10/15/imf-projects-asia-pacific-expansion-easing-through-2027",
  "topic": "world",
  "section": "World",
  "published": "2026-10-15T10:05:13.000Z",
  "source": {
    "name": "Arabian Post",
    "slug": "arabian-post",
    "url": "https://thearabianpost.com/imf-projects-asia-pacific-expansion-easing-through-2027/"
  },
  "original_language": "en",
  "account": "The International Monetary Fund (IMF) has projected a slowdown in economic growth across the Asia-Pacific region over the next two years, as reported on Thursday. The region is expected to expand by 4.8% in 2026, down from 5% in 2025, and further to 4.4% in 2027. This forecast marks an improvement from the 4.4% growth predicted in April. The slowdown is attributed to contrasting pressures across the region, with technology investment and demand for semiconductors, data centres, and other technology equipment boosting exports and investment, while higher energy costs due to the Middle East conflict have strained economies reliant on imported fuel.\n\nEmerging and developing Asian economies are forecast to grow by 5.1% this year, from 5.6% in 2025, and slow to 4.9% in 2027. Advanced economies are projected to expand by 3.2% in 2026, down from 2.5% in 2025, and further to 2% in 2027. The IMF upgraded forecasts for South Korea, Taiwan, and Hong Kong, where demand for AI infrastructure has bolstered manufacturing and exports. China and India also saw upward revisions in their growth projections, despite higher inflation without proportional technology gains leading to weaker growth projections.\n\nIMF Director of the Asia and Pacific Department, Krishna Srinivasan, highlighted that technology exports surged during the first half of 2026, driven by demand for chips, data centre investment, and stronger regional trade. In response to energy disruptions, countries have diversified fuel suppliers, reduced consumption, increased alternative energy use, and drawn down inventories. However, these measures have not fully mitigated the uneven impact of the energy shock. Governments have also implemented measures to control inflation, protect incomes, and prevent supply shortages, but these adjustments have not erased the disparate effects of the energy crisis.\n\nBangladesh, Cambodia, and Laos, among other fuel-importing economies with limited direct exposure to the AI investment boom, possess comparatively limited financial resources to manage additional pressures. The IMF advised monetary authorities to maintain price stability as expensive energy could drive inflation expectations upward. The fund cautioned that central banks might face challenging decisions if weaker growth coincides with persistent price pressures, especially where currencies and capital flows react to global interest rate changes. Fiscal policy should prioritize vulnerable households and businesses over costly blanket subsidies, according to the IMF.\n\nThe regional assessment comes as investors question the sustainability of spending on AI infrastructure. Asian technology shares dipped sharply on Thursday, with South Korea's benchmark stock index falling nearly 8% and Japan's Nikkei declining by about 5%, amid concerns over US inflation and borrowing costs. The IMF also flagged concentrated stock market valuations and increased investor leverage as potential sources of instability. A significant market correction could impact financing conditions and confidence even in economies with robust demand for technology products.\n\nAdditionally, the IMF anticipates China's growth to decelerate from 5% in 2025 to 4.5% this year and further to 4% in 2027. The fund recommends stronger domestic demand and fiscal measures to counter deflationary pressures rather than continued reliance on external sales. Beyond financial markets, the IMF emphasized employment challenges stemming from technological change. Srinivasan noted a decline in employer demand for jobs more exposed to AI by 10%, although this trend appears to have stabilized as employers seek workers with relevant skills. The IMF recommended addressing youth unemployment, skills mismatches, strengthening social protection, and improving energy security through diversification and renewable energy sources. It also advocated for deeper regional trade integration to preserve market access despite tariff barriers. The regional outlook also warned of potential disruption to agriculture, fisheries, and hydropower generation due to a severe El Niño episode, which could affect food and electricity prices in vulnerable economies, particularly those heavily reliant on imported energy.",
  "summary": "Asia-Pacific economic growth is expected to slow over the next two years despite a powerful boost from artificial intelligence investment, the International Monetary Fund warned on Thursday. The IMF forecast regional expansion of 4.8 per cent in 2026, compared with 5 per cent last year, followed by a further slowdown to 4.4 per cent in 2027. Its latest estimate for this year nevertheless…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}