## Asia’s Economic Resilience Amid Uncertainty: Can it be Sustained? _IMF Blog, October 15, 2026_ ## Source details **Canonical URL:** [Asia’s Economic Resilience Amid Uncertainty: Can it be Sustained?](https://www.imf.org/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained) ## Other formats - [Markdown version](/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained/index.md) - [Structured JSON version](/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained/index.json) - [Bundle manifest](/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained/bundle-manifest.json) ## Bibliographic details - Authors: Alasdair Scott, Krishna Srinivasan - Published: October 15, 2026 --- ### Regional growth outlook and composition - 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. - IMF staff upgraded the regional growth projection for this year to 4.8 percent, from 4.4 percent six months ago. - IMF staff raised the forecast for next year to 4.4 percent, from 4.2 percent. - 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. - The largest upgrades are for India, Korea, and parts of Southeast Asia that are benefiting from strong demand along the tech supply chain. - Projections for low-income and Pacific island economies have been revised down, substantially so in some cases. ### Drivers of resilience - Adaptation to oil shocks: - China has been able to draw on oil reserves and reduce demand, including due to greater use of renewables. - India and Japan have been able to find alternative sources of supply. - Across Asia, governments have deployed policy measures such as fuel price caps and subsidies to protect households and firms. - AI-related demand: - 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. - Trade dynamics: - Exports—even of non-tech products—have continued to grow. - Intra-Asia trade has surged even as commerce with the United States fell. - Asia-Pacific governments have pursued deeper regional trade agreements and largely resisted restrictive practices. ### Risks and fiscal constraints - Oil prices are likely to stay high and volatile for longer than previously expected. - There are limits to adaptation, such as how far crude inventories can stretch. - Fiscal support in many economies is broad based and often untargeted, adding to pressure on public finances. - Yields on sovereign debt have risen sharply around the world, including in Asia, and investors are increasingly concerned about the sustainability of public finances. - While many Asian economies have reduced deficits, some have delayed consolidation amid mounting spending pressure from aging populations, defense commitments, and rising interest bills. - Fuel price impacts: - Diesel is crucial for electricity generation in low-income countries. - Jet fuel is essential for air travel, especially to Pacific island countries. - Growth within countries is uneven, with many showing signs of “K-shaped” growth. ### Structural challenges and labor market needs - The region will need to create nearly 150 million jobs over the next decade. - 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. - 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. ### Evidence on AI and employment - Analysis of millions of online job postings in the Asia-Pacific Department’s October 2026 Regional Economic Outlook finds: - 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. - That decline has stabilized, even while AI has become more capable over time. - Employers increasingly want workers who can use AI to do more, from sharpening prompts to connecting AI with the data and expertise in workplaces. - Interpretation in the report: - AI is reshaping work more than eliminating it. - 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. ### Policy implications and questions - Policymakers must address how to sustain the region’s economic resilience by: - Managing persistent high and volatile oil prices and limits to adaptation. - Targeting fiscal support more effectively to protect vulnerable households and firms while preserving public finance sustainability. - Supporting job creation in an era when manufacturing is more capital intensive and AI reshapes labor demand. - Reforming education and training to equip workers for an AI-driven labor market and the creation of knowledge-based service jobs. --- ## References - [Asia-Pacific Department’s October 2026 Regional Economic Outlook](https://www.imf.org/en/publications/reo/apac/issues/2026/10/15/regional-economic-outlook-for-asia-and-pacific-october-2026?cid=bl-com-am26-PB_REOAPD) - [AI is reshaping labor markets in the region.](https://www.imf.org/en/meetings/2026/annual/schedule/2026/10/12/analytical-corner-labor-markets-in-asia-challenges-and-opportunities-in-the-age-of-ai-212361) - [Shaping the Future of Asia: Opportunities and Challenges.](https://www.imf.org/en/publications/books/issues/2026/09/30/shaping-the-future-of-asia-opportunities-and-challenges-573484) _Source: https://www.imf.org/en/blogs/articles/2026/10/14/blog-asias-economic-resilience-amid-uncertainty-can-it-be-sustained_