The International Monetary Fund (IMF) has revised its economic growth forecasts for major Southeast Asian economies, highlighting an uptick in investments related to artificial intelligence (AI) and technology infrastructure as key drivers. In its latest World Economic Outlook report, the IMF now projects that the collective growth rate for Indonesia, Malaysia, the Philippines, Singapore, and Thailand will reach 4.4% in 2026, up from a previously estimated 4.1%.
This upward adjustment contrasts with the global economic growth projection of 3.1% for 2026, a slight increase from the 3% forecast issued in July. Meanwhile, the growth forecast for 2027 remains steady at 3.4%, close to the 3.5% recorded in 2025. The IMF attributes the improved outlook for Southeast Asia to increased investments in data centers and other infrastructure that support the global AI boom.
While Southeast Asian economies are poised for growth, China’s economic projection for 2026 has been slightly revised downward to 4.5%, a decrease from the 5% growth recorded in 2025. The report notes that higher global oil prices and ongoing uncertainties are placing pressure on China’s economic prospects.
The IMF underscores that technology-related investments are bolstering global growth by enhancing demand and exports in countries linked to high-tech supply chains. However, it cautions that energy-importing economies with minimal exposure to the technology sector could face challenges such as increased costs, diminished purchasing power, and tighter government budgets.
In terms of inflation, the IMF projects global headline inflation to rise to 4.7% in 2026, up from 4.1% in 2025, primarily due to higher energy and food prices. A slight easing to 4.1% is anticipated by 2027. The organization also warns that ongoing geopolitical tensions, trade disputes, and financial market volatility could pose risks to the global economic outlook.
To address rising energy and food costs, the IMF advises that government support should be temporary and targeted to prevent undermining public finances. The report stresses the importance of strategic fiscal interventions to maintain economic stability amid potential global disruptions.