World Bank Raises East Asia-Pacific Growth Forecast, Warns of AI Concentration Risks

Deep News
8 hours ago

The World Bank has raised its economic growth forecast for East Asia and the Pacific, driven by growth in artificial intelligence-related exports, but simultaneously warned that the region's economy is vulnerable to a potential pullback in global technology spending due to its reliance on the AI boom.

According to the World Bank's latest report released on Tuesday, the region's economy is expected to grow 4.5% in 2026, 0.3 percentage points higher than the April forecast. Growth rates are expected to slow to 4.4% and 4.3% in 2027 and 2028, respectively.

Among the region's major economies, Vietnam saw the largest upward revision, with its growth forecast raised by 1.1 percentage points to 7.4%.

However, the region's economic strength relies heavily on AI-related manufacturing and exports. The World Bank noted that excluding AI-related products, trade growth performance was "weak or negative." In most surveyed economies, such products contributed more than half of export growth; in Malaysia, the Philippines, Thailand, and Vietnam, this proportion exceeded 70%.

Official data shows that South Korea's exports in September grew 83.5% to a record $120.9 billion, with chip exports accounting for half of the total. To illustrate the semiconductor industry's dominance in the country's market, the World Bank pointed out that as of the end of April, just two chipmakers — Samsung and SK Hynix — accounted for 43% of the total market capitalization of the Kospi index.

AI-related risks primarily exist at the spending level. The World Bank stated that AI-related capital expenditure has reached approximately 6% of U.S. GDP, a ratio comparable to the peak level of information technology investment in 2000; moreover, the current investment cycle's growth rate "exceeds any previous cycle and is still accelerating."

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