{
  "title": "Asia’s Economic Resilience Amid Uncertainty: Can it be Sustained?",
  "publication": "IMF Blog, October 15, 2026",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained",
  "canonical": "https://www.imf.org/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained",
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  "summary": "The world’s economic growth engine has proven resilient, but making this durable requires adapting to AI and other transformations",
  "authors": [
    "Alasdair Scott",
    "Krishna Srinivasan"
  ],
  "publishDate": "2026-10-15",
  "sections": [
    {
      "heading": "Regional growth outlook and composition",
      "content": "- The Asia-Pacific region was described as remaining resilient despite the energy shock and the tariffs and trade restrictions that disrupted supply chains last year.\n- IMF staff upgraded the regional growth projection for this year to 4.8 percent, from 4.4 percent six months ago.\n- IMF staff raised the forecast for next year to 4.4 percent, from 4.2 percent.\n- Asia’s overall growth rate is likely to slow from 5 percent last year, while the region would remain the engine of the global economy, providing two-thirds of global growth.\n- The largest upgrades are for India, Korea, and parts of Southeast Asia that are benefiting from strong demand along the tech supply chain.\n- Projections for low-income and Pacific island economies have been revised down, substantially so in some cases."
    },
    {
      "heading": "Drivers of resilience",
      "content": "- Adaptation to oil shocks:\n  - China has been able to draw on oil reserves and reduce demand, including due to greater use of renewables.\n  - India and Japan have been able to find alternative sources of supply.\n  - Across Asia, governments have deployed policy measures such as fuel price caps and subsidies to protect households and firms.\n- AI-related demand:\n  - A significant AI-related boost in global demand for tech goods and services is supporting growth, seen most prominently in demand for high-end semiconductors and other components, and massive investments in data centers.\n- Trade dynamics:\n  - Exports—even of non-tech products—have continued to grow.\n  - Intra-Asia trade has surged even as commerce with the United States fell.\n  - Asia-Pacific governments have pursued deeper regional trade agreements and largely resisted restrictive practices."
    },
    {
      "heading": "Risks and fiscal constraints",
      "content": "- Oil prices are likely to stay high and volatile for longer than previously expected.\n- There are limits to adaptation, such as how far crude inventories can stretch.\n- Fiscal support in many economies is broad based and often untargeted, adding to pressure on public finances.\n- Yields on sovereign debt have risen sharply around the world, including in Asia, and investors are increasingly concerned about the sustainability of public finances.\n- While many Asian economies have reduced deficits, some have delayed consolidation amid mounting spending pressure from aging populations, defense commitments, and rising interest bills.\n- Fuel price impacts:\n  - Diesel is crucial for electricity generation in low-income countries.\n  - Jet fuel is essential for air travel, especially to Pacific island countries.\n- Growth within countries is uneven, with many showing signs of “K-shaped” growth."
    },
    {
      "heading": "Structural challenges and labor market needs",
      "content": "- The region will need to create nearly 150 million jobs over the next decade.\n- Manufacturing is becoming increasingly capital intensive, reducing its historical role as an employment generator and increasing emphasis on creating good knowledge jobs in services sectors.\n- Policymakers face questions on how to create jobs as AI changes which industries are best able to generate them and what kind of education young people need for an AI-driven labor market."
    },
    {
      "heading": "Evidence on AI and employment",
      "content": "- Analysis of millions of online job postings in the Asia-Pacific Department’s October 2026 Regional Economic Outlook finds:\n  - Demand from employers fell with the onset of AI in jobs where AI can be used more extensively than in occupations with less exposure, by as much as 10 percent.\n  - That decline has stabilized, even while AI has become more capable over time.\n  - Employers increasingly want workers who can use AI to do more, from sharpening prompts to connecting AI with the data and expertise in workplaces.\n- Interpretation in the report:\n  - AI is reshaping work more than eliminating it.\n  - Employers still want people for knowledge-based work, even as AI has become much more capable at tasks previously thought to only be possible by humans."
    },
    {
      "heading": "Policy implications and questions",
      "content": "- Policymakers must address how to sustain the region’s economic resilience by:\n  - Managing persistent high and volatile oil prices and limits to adaptation.\n  - Targeting fiscal support more effectively to protect vulnerable households and firms while preserving public finance sustainability.\n  - Supporting job creation in an era when manufacturing is more capital intensive and AI reshapes labor demand.\n  - Reforming education and training to equip workers for an AI-driven labor market and the creation of knowledge-based service jobs."
    }
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