East Asia’s AI Boom Fuels Growth and Opens a New Path to Better Jobs

Viet Nam, Malaysia and Thailand have performed better than anticipated in 2026, supported by the manufacture and export of high-tech goods feeding a global surge in AI-related activity.

East Asia and Pacific is projected to grow by 4.5% in 2026, with demand for the technology behind artificial intelligence helping the region withstand global economic pressures. The World Bank's latest biannual Economic Update describes an economy drawing strength from its manufacturing and export industries, though the benefits differ across countries and sectors. Its assessment covers near-term growth prospects and a deeper question for the region's future: how countries can turn the business of supplying AI-related goods into wider use of technology that raises productivity, improves incomes and creates better jobs.

High-Tech Exports Lift Forecasts Across Several Economies

Viet Nam, Malaysia and Thailand have performed better than anticipated in 2026, supported by the manufacture and export of high-tech goods feeding a global surge in AI-related activity. The report raises Viet Nam's growth forecast by 1.1 percentage points to 7.4%, Malaysia's by 0.7 percentage points to 5.1%, and Thailand's by 0.7 percentage points to 2.0%. These revisions show how the region's connections to global production networks are helping several economies benefit from spending on the equipment and technology that make AI possible.

China, the region's largest economy, is growing at 4.4%, with a soft labour market and continuing adjustments in the property sector holding back domestic demand. Pacific Island countries face a different set of pressures, particularly their vulnerability to high energy prices and limited financial buffers against external shocks, with growth projected at 2.2%, half a percentage point below the earlier forecast. World Bank Vice President for East Asia and Pacific Carlos Felipe Jaramillo described the region's economic dynamism and integration into global value chains as important strengths, stressing that broader AI adoption must translate those advantages into opportunities for millions of people.

Accessible AI Tools Could Bring Benefits to More Businesses

The report's special analysis finds that supplying goods for global AI investment does not automatically bring widespread use of the technology at home. Adoption by individuals and firms is increasing, but remains behind advanced economies, with businesses facing high costs, limited expertise, and concerns about security and privacy. For most countries, the largest near-term gains are expected to come from "Small AI", meaning the adoption and adaptation of existing technologies, particularly accessible tools that businesses can put to practical use without developing their own sophisticated systems.

Sarvesh Suri, IFC Regional Vice President for Asia and the Pacific, sees a central role for the private sector in turning AI investment into more and better jobs through funding for digital and energy infrastructure, expanded business financing and investment in workforce skills. These measures could help smaller firms become more competitive and resilient, giving them greater capacity to adopt technology across their operations. The report finds no significant impact so far on jobs that can be automated, although employers are already seeking a different mix of skills, combining AI expertise with analytical abilities and social skills.

Better Jobs Depend on Skills, Local Tools and Public Action

AI offers the strongest support for work involving complex thinking and judgment, a category accounting for only 13% of jobs in East Asia and Pacific compared with 39% in advanced economies. The report recommends action in three areas: enabling adoption through a strong business environment, reliable energy and digital infrastructure, financing and worker skills; adapting affordable local-language tools for sectors such as tourism and agribusiness that employ people at scale across skill levels; and strengthening governments' roles as AI users and regulators. Better public services, stronger digital foundations, effective regulation and regional cooperation would help spread the benefits across businesses, workers and communities.