World Bank Projects 4.5% Growth for East Asia and Pacific in 2026, Urges AI Reforms
World Bank projects East Asia and Pacific growth at 4.5% in 2026, with uneven AI adoption; calls for infrastructure, skills and policy reforms.
The story in focus
The World Bank projects East Asia and Pacific to grow 4.5% in 2026, citing resilience amid global headwinds. Growth is uneven, with AI adoption rising but trailing advanced economies. The report urges reforms in infrastructure, skills and policy to turn AI potential into jobs.
- World Bank projects EAP growth at 4.5% in 2026, with Viet Nam revised up to 7.4%, Malaysia to 5.1% and Thailand to 2.0%.
- Pacific Island countries grow at 2.2%, 0.5 percentage point slower than previously anticipated, while China grows at 4.4%.
- AI adoption is uneven; only 13% of jobs in the region require complex thinking and judgment, compared to 39% in advanced economies.
Growth outlook and revisions
The World Bank's bi-annual Economic Update for East Asia and Pacific projects regional growth at 4.5% in 2026. The report says growth remains uneven across economies and sectors. Several economies grew faster than anticipated, driven by manufacturing and exports of high-tech goods linked to global AI-related activity. Viet Nam's 2026 forecast was revised up by 1.1 percentage points to 7.4%, Malaysia by 0.7 to 5.1%, and Thailand by 0.7 to 2.0%. China, the largest economy, grows at 4.4% as domestic demand is constrained by a soft labor market and property-sector adjustments. Pacific Island countries grow at 2.2%, 0.5 percentage point slower than previously anticipated, with vulnerability to high energy prices and limited buffers.
AI adoption and jobs
A special analysis finds that several economies benefit from supplying goods for global AI investment, but technology reach across the wider economy is uneven. Adoption among individuals and firms is rising but trails advanced economies, with businesses citing high costs, limited expertise, and security and privacy concerns. The report says near-term gains for most countries will come from adopting and adapting existing, accessible AI tools. AI has not yet significantly affected automatable jobs but is reshaping skills demand. Only 13% of jobs in the region require complex thinking and judgment, compared to 39% in advanced economies.
Recommended actions
The report recommends bold action in three areas: enabling AI adoption through a strong business environment, energy and digital infrastructure, financing and skills; adapting AI locally with affordable local-language tools in sectors such as tourism and agribusiness; and harnessing governments' roles as AI users and regulators to improve public services, digital foundations, regulations and regional cooperation. World Bank Vice President Carlos Felipe Jaramillo said the challenge is to turn the region's strength in producing AI-related goods into widespread adoption that boosts productivity and creates jobs.
Which economies had their 2026 growth forecasts revised upward?
Viet Nam was revised up by 1.1 percentage points to 7.4%, Malaysia by 0.7 to 5.1%, and Thailand by 0.7 to 2.0%, according to the World Bank report.
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