IMF warns of slowing Asian growth, spillover from rising yields
SPY•The IMF expects Asia’s economy to grow 4.8% in 2026 and 4.4% in 2027, down from 5.0% in 2025. It warned that energy shocks, a potential AI correction and rising global yields pose downside risks.
1. Growth forecast
The IMF projected Asia’s economic growth would moderate to 4.8% in 2026 and 4.4% in 2027, after 5.0% growth in 2025. The revisions from its April forecasts largely reflected the boost from the AI boom for advanced Asian economies, while emerging Asia’s growth is expected to ease to 5.1% in 2026 from 5.6% last year.
2. Financial risks
The IMF said exchange rates and capital flows have become more volatile since this year’s energy shock, and that US monetary tightening and fiscal pressures could push up yields across Asia and the Pacific. It warned that a prolonged Middle East conflict, a correction in AI demand or stress in major sovereign bond markets could weigh on regional growth and strain public finances.
