AMRO Raises ASEAN Growth Forecast to 4.9% for 2026

AMRO Raises ASEAN Growth Forecast to 4.9% for 2026

The ASEAN+3 Macroeconomic Research Office (AMRO) expects Southeast Asia’s ASEAN economies to grow by 4.9% in 2026, upgrading its earlier projection as technology-related exports and investment help support economic activity despite global uncertainty.

The forecast, published in AMRO’s October update of the ASEAN+3 Regional Economic Outlook on October 5, compares with the organisation’s April projection of 4.6% growth for ASEAN in 2026. The new estimate puts the region’s expected expansion level with its estimated 2025 growth rate. AMRO forecasts growth to ease slightly to 4.8% in 2027.

The revision points to continued resilience across a region that has been navigating shifting trade policies, geopolitical tensions and higher energy costs. However, the improved regional outlook does not mean every economy is experiencing the same conditions, and it does not remove the risks facing manufacturers, households and investors.

Technology demand supports the outlook

Demand linked to artificial intelligence (AI), semiconductors and electronics has become an important source of support for Asian trade and investment. Companies expanding computing capacity and digital infrastructure require a wide range of products, including advanced chips, electronic components and equipment used in data centres.

Southeast Asian economies have opportunities to benefit from this spending through electronics manufacturing, component assembly, logistics and related services. The extent of those gains, however, depends on each country’s industrial capabilities, workforce, infrastructure and ability to attract investment that generates lasting domestic value.

AMRO’s October assessment also highlights the role of AI-related exports and investment in supporting the wider ASEAN+3 region. That broader grouping—which includes the 10 ASEAN members alongside China, Japan and South Korea—has a different economic profile from ASEAN alone. AMRO projects ASEAN+3 growth of 4.1% in both 2026 and 2027, with the 2026 forecast unchanged from its July update.

The distinction matters when interpreting the headline figures: the 4.9% forecast applies to ASEAN, while 4.1% covers the wider ASEAN+3 grouping.

Growth remains uneven between countries

A regional average can conceal substantial differences between individual economies. Manufacturing exposure, domestic consumption, tourism, public investment and inflation all affect how much growth each country can achieve.

AMRO’s October update illustrates that divergence. Malaysia’s 2026 growth forecast was raised to 5.1% from 4.9%, with the organisation citing strong AI-related exports and investment. Its 2027 projection was also increased, to 4.8% from 4.7%.

The Philippines faced a less favourable revision. Reporting on AMRO’s October outlook said the organisation reduced its 2026 growth projection for the country to 3.3% from 3.4%, citing elevated inflation and weak investment. That downgrade demonstrates why stronger aggregate regional growth should not be read as evidence of an across-the-board improvement.

For businesses deciding where to build factories, expand distribution networks or establish technology operations, these differences can be as important as the headline ASEAN forecast. Access to skilled workers, reliable electricity, transport links, regulatory conditions and supplier networks can influence whether an investment translates into sustained productivity and employment.

Inflation and energy costs remain key risks

The outlook also comes against a difficult energy backdrop. AMRO’s October assessment said disruptions linked to the Middle East conflict had pushed up energy costs and increased headline inflation pressures, even as underlying core inflation remained more contained.

Higher fuel and transport costs can affect manufacturers, shipping operators and retailers, while also reducing households’ purchasing power. For economies that depend heavily on imported energy, prolonged supply disruptions could put additional pressure on prices and business margins.

AMRO’s wider ASEAN+3 forecast puts inflation at 1.6% in 2026 and 1.7% in 2027. Those figures apply to the broader grouping and should not be confused with the inflation outlook for ASEAN alone. A separate report on AMRO’s ASEAN forecast put regional inflation at 3.7% in 2026, easing to 3.4% in 2027.

Other risks include a slowdown in AI-related demand, renewed trade restrictions, financial-market volatility and weather-related pressure on food prices. AMRO has specifically identified the possibility that weaker technology demand could affect exports and investment, while further energy disruption could worsen the growth-inflation trade-off.

What the forecast means for businesses and investors

The 4.9% growth projection offers a positive baseline for companies operating across Southeast Asia, but it is not a guarantee of stronger performance for every sector or market. Businesses considering new facilities or supplier relationships will still need to assess country-specific costs, infrastructure, workforce availability and policy conditions.

Investors will also need to distinguish between short-term gains from technology-related demand and improvements that can be sustained through productivity, domestic investment and broader economic participation. A surge in exports can support growth, but the long-term benefits depend partly on how successfully countries build local capabilities and spread those gains through their economies.

For policymakers, the challenge is to preserve investment momentum while managing inflation, energy vulnerability and uneven growth. Better infrastructure, predictable regulation, workforce development and stronger regional supply-chain links could help economies turn near-term demand into more durable gains.

The next indicators to watch include export orders, semiconductor and electronics demand, inflation trends and the direction of energy prices. Any further changes in trade policy or AI-related spending could also alter the outlook.

For now, AMRO’s revised forecast suggests ASEAN is set to maintain solid growth in 2026. The key question is whether that resilience can hold if external demand weakens or energy pressures intensify—and how evenly the expected expansion will be shared across the region.