Description

The outlook for Asia and the Pacific is being shaped by three major factors: the energy shock arising from the conflict in the Middle East, the AI-driven technology boom, and the continued trade reconfiguration following trade policy shocks. The region overall has shown resilience, with some countries adapting to energy disruptions, strong technology-related demand, and trade diversification. But the effects are uneven across the region and even within economies where tech-related sectors are benefiting more than other parts of the economy. Furthermore, buffers are not unlimited and, going forward, the resilience is likely to be tested. Policies should balance near-term stabilization with rebuilding buffers. Over the medium term, labor-market reforms, stronger social safety nets, and deeper services trade integration will be critical to sustaining growth.

More publications in this series: Regional Economic Outlook