Economic expansion across the ASEAN+3 bloc is projected to slow to 4.1% in 2026 from 4.3% in 2025, as escalating geopolitical tensions and higher costs weigh on regional activity despite a boom in artificial intelligence-related exports, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
AMRO expects regional growth to remain steady at 4.1% in 2027. The bloc comprises the 10 members of the Association of Southeast Asian Nations alongside China, Hong Kong, Japan, and South Korea.
"Disruptions to energy supplies and industrial inputs proved less severe than many had feared, limiting the drag on production. However, higher energy and logistics costs continued to weigh on household purchasing power and business costs," AMRO Chief Economist Dong He said in a statement.
Regional headline inflation is forecast to accelerate to 1.6% in 2026 and 1.7% in 2027, compared with 0.9% in 2025.
A more persistent El Niño could also affect the inflation outlook of the bloc, according to the organization.
For the 10 ASEAN economies alone, growth is projected to stall at 4.9% in 2026 before falling to 4.8% in 2027. Inflation across ASEAN is expected to surge to 3.7% in 2026 before cooling to 3.4% in 2027 from 2% in 2025.
