The International Monetary Fund (IMF) has revised its economic growth forecasts for major Southeast Asian economies, projecting a rise in 2026 due to increased investments in artificial intelligence (AI) and technology infrastructure. According to the IMF’s latest World Economic Outlook report, the collective growth for Indonesia, Malaysia, the Philippines, Singapore, and Thailand is now expected to reach 4.4% in 2026, an increase from the earlier estimate of 4.1%. This uptick is attributed to the expanding investments in data centers and infrastructure supporting the global AI boom.
Globally, the IMF forecasts an economic growth rate of 3.1% for 2026, up slightly from its previous 3% projection in July. The predicted growth for 2027 holds steady at 3.4%, a marginal decrease from the 3.5% recorded in 2025. Meanwhile, China’s economic growth is expected to be 4.5% in 2026, marking a slight downward revision and trailing the 5% growth seen in 2025. Influences such as higher global oil prices and prolonged uncertainties are impacting China’s economic outlook.
The IMF emphasizes that technology-related investments are playing a crucial role in supporting global growth by boosting demand and exports in countries that are part of high-tech supply chains. However, economies heavily reliant on energy imports and with limited exposure to the tech sector may face challenges, including higher costs, reduced purchasing power, and tighter government budgets.
Inflation is another concern highlighted in the report, with global headline inflation projected to rise from 4.1% in 2025 to 4.7% in 2026, largely driven by escalating energy and food prices. The IMF anticipates that inflation may ease back to 4.1% by 2027.
Despite these optimistic growth forecasts, the IMF warns of potential risks that could threaten the global economic outlook. Prolonged conflicts in the Middle East, ongoing trade tensions, and financial market volatility are cited as factors that could undermine economic stability. The IMF recommends that government interventions to counteract rising energy and food costs be temporary and carefully targeted to avoid straining public finances.