Key facts
- IMF projects Asia's economic growth to moderate in 2026 and 2027.
- Risks include Iran war energy shock, AI boom correction, and rising yields.
- Emerging Asia's growth expected to slow to 5.1% in 2026.
- Advanced Asian economies' growth to accelerate to 3.2% in 2026.
- IMF urges targeted fiscal policy and focus on price stability.
The International Monetary Fund warned on Thursday that Asia's economic growth is projected to moderate in the coming years, citing several key risks. The global lender highlighted concerns stemming from the energy shock caused by the Iran war, the potential for a correction in the booming AI sector, and the spillover effects from rising global bond yields. Uncertainty surrounding the US monetary policy path is also expected to contribute to volatility in Asian financial markets, with some emerging economies experiencing currency depreciation pressures despite generally robust foreign investment inflows. The IMF's revised forecasts show Asia's economy growing 4.8% in 2026 and 4.4% in 2027, a slowdown from the projected 5.0% expansion in 2025. Emerging Asia is expected to see its growth moderate to 5.1% in 2026 from 5.6% last year due to higher energy prices.