World Bank Raises East Asia Growth Outlook to 4.5%, Warns of AI Dependence

East Asia’s export gains are increasingly tied to AI spending, leaving the region exposed if that spending slows. The World Bank raised its 2026 East Asia and Pacific growth forecast to 4.5%, citing AI-related exports, but warned that a slowdown concentrated in AI would materially affect economies central to the industry’s supply chain.

The bank’s latest report, released October 6 and covered by CNBC, lifts the regional forecast by 0.3 percentage point from April. The improved outlook is not a prediction of accelerating growth across the next three years: the bank expects expansion to ease after 2026.

• Vietnam received the largest upgrade among the region’s major economies: its 2026 growth forecast rose 1.1 percentage point to 7.4%.
• Regional growth is forecast to slow to 4.4% in 2027 and 4.3% in 2028.

Export growth rests heavily on AI goods

AI-related goods accounted for more than half of export growth in most regional economies, according to the bank. Their contribution exceeded 70% in Malaysia, the Philippines, Thailand and Vietnam. Trade growth excluding those goods was weak or negative, showing that the export gains were not broadly shared across product categories.

The shipment totals show the scale of that exposure. China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam exported $1.4 trillion in AI-related goods during the 12 months through April, the report found. That figure measures shipments, rather than the share of export growth attributable to AI.

Concentration also reaches financial markets. The bank highlighted that Samsung and SK Hynix, just two chipmakers, accounted for 43% of South Korea’s benchmark Kospi index value at the end of April.

$2.9 trillionPlanned AI capital spending, 2025–2028

The World Bank cited $2.9 trillion in planned AI capital expenditure for 2025–2028.

$800 billionExpected private-credit financing

The bank expects private credit to provide $800 billion of that planned spending.

Less-visible financing adds another vulnerability

AI-related lending rose to 34% of private-credit activity in 2025, compared with an 18% average over the previous five years. The bank warned that private-credit markets are less visible and have not been tested by a severe downturn. Those portfolios have experienced markdowns, outflows and defaults this year.

The spending cycle itself is unusually large. AI-related capital expenditure has reached about 6% of US GDP, similar to the peak in information-technology investment in 2000, the bank said. It described the current cycle as rising faster than previous cycles and still gaining speed.

A correction would not necessarily mean the AI investment cycle had collapsed. The bank said it could instead reflect investment running ahead of realized demand. Its warning is about the economic consequences of a spending adjustment, not a prediction that AI demand will disappear.

The bank estimates that a one-percentage-point slowdown in US growth reduces other emerging-market growth by 0.6 percentage point, with the investment hit about twice as large. That is a general slowdown estimate; its separate AI warning singles out East Asia’s role in supplying the industry.