Global AI Hardware Demand Powers East Asia Growth Beyond World Bank Forecasts

AI summary of the source article

Several East Asia and Pacific economies are expanding faster than expected as global demand for AI-related high-tech manufacturing and exports surges, according to the World Bank Group. In its economic update, the organization raised its 2026 growth forecasts for Viet Nam by 1.1 percentage points to 7.4%, Malaysia by 0.7 percentage points to 5.1%, and Thailand by 0.7 percentage points to 2.0%, putting overall regional growth at 4.5%. Conversely, China's growth is at 4.4% amid property sector adjustments. The World Bank noted that while the region excels in producing AI hardware, domestic AI adoption remains hindered by high costs, security concerns, and skills shortages.

Why it matters

The surge in global AI hardware demand is directly driving macroeconomic growth across East Asian exporters, shifting trade dynamics across the region. However, translating hardware manufacturing strength into domestic productivity gains requires overcoming local barriers to technology adoption.

Key facts

• The World Bank raised 2026 growth forecasts for Viet Nam to 7.4%, Malaysia to 5.1%, and Thailand to 2.0%.
• Overall East Asia and Pacific regional growth is projected at 4.5%, while China is forecast to grow at 4.4%.
• Domestic AI adoption in the region trails advanced economies due to concerns over high costs, expertise, security, and privacy.