The IMF forecasts Asia will slow to 4.8% growth in 2026 and 4.4% in 2027, below
2025’s 5.0%, and warned that an energy shock from the Iran war, a potential
correction in the AI boom and spillovers from rising global bond yields amplify
downside risks. The Fund said US monetary policy uncertainty could keep Asian
financial markets volatile and noted exchange-rate and capital-flow volatility
have risen since the energy shock, with some emerging markets under
local-currency depreciation pressure. The upward revision versus April mainly
reflects a stronger AI-linked boost to developed Asia, where growth is seen
rising to 3.2% in 2026 from 2.5% last year; emerging Asia, while still the
growth engine, may slow to 5.1% in 2026 from 5.6% in 2025.
