Post by The World Bank Group

𝗡𝗘𝗪 𝗥𝗘𝗣𝗢𝗥𝗧  | Growth in East Asia and Pacific is slowing, but the region still remains one of the strongest performers globally. According to the East Asia and Pacific Economic Update, regional growth is projected to slow to 4.2% in 2026 from 5.0% in 2025. The slowdown reflects multiple pressures, including higher energy costs linked to the Middle East conflict, elevated trade barriers, global policy uncertainty, and domestic economic challenges. 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 ➡️ Regional growth is expected to slow to 4.2% in 2026, down from 5.0% in 2025 ➡️ Energy shocks, trade barriers, and global uncertainty are key external headwinds ➡️ China’s slowdown is driven by weak domestic demand, property sector challenges, and weaker exports ➡️ AI-related exports and investment are a bright spot, especially in Malaysia, Thailand, and Viet Nam ➡️ AI adoption remains limited, with only 13 to 17% of firms in China and Thailand using it, compared to much higher levels in industrial economies ➡️ A sustained 50% increase in fuel prices could reduce household incomes by 3 to 4% in the region The report emphasizes the need for targeted support that protects vulnerable households and small and medium enterprises without creating fiscal strain. It also highlights that industrial policy can be effective when it builds on strong foundations such as infrastructure, education, regulatory quality, and openness to trade and investment. Where these fundamentals are weak, policy effectiveness is significantly reduced. The region has shown strong resilience, but sustaining growth will depend on addressing structural constraints and embracing productivity gains from digital transformation. Explore the full report to understand how East Asia and Pacific can navigate uncertainty while unlocking the next phase of inclusive growth and job creation. https://lnkd.in/eN3GRtB2