ASEAN+3 Region likely to grow at 4% in 2026: AMRO

Inflation is estimated at 0.9 per cent in 2025 and projected at 1.2 per cent in 2026, remaining below the region’s long-run average.

The growth updates reflect upward revisions of 0.2 percentage points for both years compared with the October 2025 AREO update. The region’s solid performance in 2025 was underpinned by less severe tariff outcomes than initially expected, resilient technology export growth, strong investment in ASEAN, and accommodative macroeconomic policies.

“The ASEAN+3 region has demonstrated notable resilience, navigating global uncertainties more effectively than anticipated,” said AMRO chief economist Dong He. “Strong technology demand and robust FDI inflows into emerging sectors, including advanced electronics, electric vehicles, and digital services, have helped cushion growth despite ongoing tariff headwinds.”

Risks to the outlook have become more balanced, but uncertainty remains elevated. Key concerns include unpredictable US trade policy and the potential extension and broadening of protectionist measures. A sharp slowdown in technology demand, whether from market corrections or delays in downstream AI deployment, could weigh on regional exports, given the sector’s extensive regional linkages. Other downside risks include slower growth in major economies and heightened financial market volatility.

“While the balance of risks has improved, the external environment remains highly uncertain. In the near term, maintaining policy readiness to respond to emerging shocks is critical. Over the longer term, diversifying growth drivers and deepening regional economic integration will be essential to strengthen the region’s resilience,” he added.

ALCHEMPro News Desk (RR)