The International Monetary Fund (IMF) has revised its economic growth forecasts for major Southeast Asian economies, projecting a more optimistic outlook for 2026 due to increased investments in artificial intelligence (AI) and technology infrastructure. In its latest World Economic Outlook report, the IMF forecasts a collective growth rate of 4.4% for Indonesia, Malaysia, the Philippines, Singapore, and Thailand, up from an earlier estimate of 4.1%.
The IMF attributes this improved outlook to the surge in investments in data centers and infrastructure that support the global AI boom. This technological advancement is expected to boost demand and exports in countries that are part of high-tech supply chains, according to the report.
Globally, the IMF has adjusted its economic growth forecast for 2026 to 3.1%, slightly higher than the 3% projected in July. However, the growth projection for 2027 remains steady at 3.4%, following a recorded growth of 3.5% in 2025. Meanwhile, China’s growth forecast for 2026 has been slightly reduced to 4.5%, influenced by higher global oil prices and prolonged economic uncertainty.
Despite the positive projections for Southeast Asia, the IMF cautions that energy-importing economies with limited technology sector exposure may face challenges such as higher costs, reduced purchasing power, and tightened government budgets. The report also highlights the risks posed by ongoing geopolitical tensions, trade disputes, and financial market volatility, which could potentially threaten the global economic outlook.
In terms of inflation, the IMF expects global headline inflation to rise to 4.7% in 2026 from 4.1% in 2025, largely driven by increased energy and food prices. Inflation is anticipated to decrease to 4.1% in 2027. The IMF recommends that government interventions to mitigate the impact of higher energy and food costs should be temporary and targeted to prevent adverse effects on public finances.
