The World Bank has raised its growth forecast for East Asia and the Pacific to 4.5% this year, an increase of 0.3 percentage point from its previous outlook. It released its East Asia & Pacific Economic Update on Tuesday, 6 October 2026.
The stronger forecast rests largely on investment and exports associated with the artificial-intelligence boom. The bank left its forecast for 4.4% growth next year unchanged.
That makes for an uneven regional picture. AI-linked activity is providing the lift, while higher energy costs have already weighed on manufacturing and rising transport prices have hit consumer demand.
Indonesia, Thailand and Vietnam have moved to hold down retail gasoline prices. Their dollar war chests have fallen by between 15% and 40% this year as they absorbed the oil shock.
The World Bank said governments in the region had responded more aggressively than peers elsewhere to the US-Iran war, which drove up global oil prices. It said they had relied more heavily on subsidies.
For now, the bank said, energy risks are outweighed by the “AI tailwinds”.
Its warning is about what happens if that balance changes. A longer-lasting energy shock could put the region's resilience at risk, particularly if it arrives alongside a downturn in the AI cycle and El Niño weather disruptions, the bank said.
The bank expects Middle East oil exports to remain below pre-conflict levels until mid-2027.
In the Philippines, the World Bank raised its 2024 economic growth forecast to 5.5%, from 4.8%. It expects domestic demand and investment to provide the main support.
The projected Philippine rate is expected to be lower than that of other Southeast Asian economies. The World Bank also said the country's growth remained vulnerable to global economic headwinds and domestic challenges.
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