ASEAN+3 Macroeconomic Research Office (AMRO) said Monday it is projecting the ASEAN+3 region to grow by 4.1 percent in 2026, up from its June forecast of 4 percent, reflects sustained momentum in the region’s technology sector, particularly robust demand for semiconductors and other artificial intelligence (AI)-related products.
The improved outlook reflects stronger AI demand, with semiconductor sales expected to accelerate further from the robust growth recorded in 2025, according to AMRO’s July 2026 Quarterly Update of the ASEAN+3 Regional Economic Outlook (AREO).
Given ASEAN+3 contributes to nearly half of global AI-related exports, stronger technology demand is expected to support regional exports and investment.
“ASEAN+3 has remained resilient, supported by firm domestic demand and its central role in global AI supply chains,” said AMRO Chief Economist Dong He.
The report highlighted that ASEAN+3 is on track to maintain solid growth in the first half of 2026, as robust AI-driven demand offsets headwinds from the prolonged Middle East conflict.
The region’s net exports also continued to support growth, buoyed by strong AI-related semiconductor and electronics demand.
It is noted that stronger-than-expected global AI-related demand has continued to support regional exports.
ASEAN+3 export growth accelerated to almost 20 percent in the first quarter, with AI-enabling goods accounting for almost two-thirds of the increase.
The upturn has been driven by the global memory cycle: worldwide semiconductor sales nearly doubled in the first five months of the year, reflecting primarily the sharp rise in memory prices amid capacity constraints linked to AI infrastructure investment.
Regional financial markets have also performed unevenly amid strong AI demand and continued uncertainty surrounding the Middle East conflict.
It is noted that regional equity markets recovered further between April and early July, although they continued to lag global peers as AI-driven gains remained concentrated in US 00technology stocks.
Technology shares led gains within the region, with the rally briefly interrupted by a late-June sell-off in semiconductor stocks.
The outlook, however, remains subject to significant uncertainty.
According to the report, slower-than-expected tech demand is one of the key risks, as exports of AI-related products have accounted for more than two-thirds of the region’s overall export growth over the past year.
With much of the recent strength driven by prices rather than volume, even a moderation in AI-related demand – short of an outright correction – could weigh on regional exports and investment.
Under a scenario in which global tech-driven investment slows more moderately to its 2024 pace, ASEAN+3 growth could slow to 3.7 percent in 2026 and 2.5 percent in 2027 – a weaker outcome than under the Middle East scenario, and the region’s slowest growth since the Asian Financial Crisis outside the pandemic years.
A disorderly correction in AI-related asset valuations could amplify these effects through financial channels.
“The wide range of plausible outcomes underscores the importance of continued vigilance and sound macroeconomic policies,” He added. “Policymakers will need to respond flexibly to differing domestic conditions and rapidly evolving external risks, particularly the AI cycle and the Middle East conflict.”
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