Hanoi (VNA) – ASEAN+3 comprising ASEAN member states and China, Japan and the Republic of Korea is forecast to grow by 4.1% in both 2026 and 2027 despite the impact of the Middle East energy shock, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
The projection was included in AMRO’s October update of the ASEAN+3 Regional Economic Outlook (AREO), which said the 2026 growth forecast remained unchanged from its July update, while the 2027 forecast was raised by 0.1 percentage point, supported by stronger AI-related exports and investment.
AMRO forecasts regional inflation at 1.6% in 2026 and 1.7% in 2027. The 2027 projection was raised by 0.1 percentage point, mainly due to higher energy costs and food-price pressures linked to El Niño.
AMRO Chief Economist Dong He said the AI investment cycle is supporting a widening range of regional activities, although domestic demand remains uneven.
Disruptions to energy supplies and industrial inputs proved less severe than many had feared, limiting the drag on production. However, higher energy and logistics costs continued to weigh on household purchasing power and business costs.
Shipping disruptions in the Strait of Hormuz have also pushed up energy prices and revived concerns about global inflation.
Despite external headwinds and rising US dollar interest rates, ASEAN+3 economies have remained resilient, with orderly market adjustments, AMRO said.
Most economies in the region continue to have sound external positions and adequate foreign exchange reserves. The banking system remains well-capitalised, liquid and profitable, while corporate and household debt-to-GDP ratios have generally declined. Public debt-to-GDP ratios have also broadly stabilised.
However, AMRO said the regional growth outlook is particularly sensitive to AI-related demand, which could strengthen or weaken exports and investment. Additional downside risks include renewed Middle East energy disruptions and a more persistent El Niño, alongside financial-market volatility and further protectionist measures.
AMRO warns that the region’s financial risks are becoming increasingly complex and interconnected. A sharp repricing of AI-related assets could trigger broader market corrections, forced deleveraging and tighter credit conditions. Abrupt USD movements could quickly transmit to ASEAN+3 economies through exchange rates, capital flows, asset prices, and funding costs.
While the growth of nonbank financial institutions (NBFIs) can broaden and diversify financing sources, rising leverage, liquidity mismatches, and interconnectedness with banks and financial markets can amplify stress. Digital finance presents additional challenges, including risks from foreign-currency-denominated stablecoins, cyberattacks, and digital fraud.
To mitigate these vulnerabilities, AMRO suggested the region maintain robust macro-financial buffers through credible policy frameworks, adequate foreign exchange reserves, and deeper local currency markets. Surveillance should adopt a system-wide perspective encompassing NBFIs and cross-sector interlinkages, while integrating digital finance risks and operational resilience against cyberattacks and fraud./.
