AMRO Warns AI Market Correction Could Hit Asia Growth

The Asean+3 Macroeconomic Research Office warned in its 2026 Financial Stability Report that Asia faces significant exposure to a potential artificial intelligence market correction. Because the region centers global AI supply chains and accounts for two-thirds of global AI-related trade growth, a disorderly correction could trigger capital outflows, lower technology exports, and refinancing pressure on leveraged firms.

AMRO estimates that a demand slowdown could reduce regional economic growth by up to 1.5 percentage points in 2027, identifying this as the primary risk factor for the region. The report specifically highlights vulnerabilities in South Korea's AI-concentrated equity markets and the susceptibility of Japan and Hong Kong to shocks originating from US technology firms.

Lead economist Runchana Pongsaparn stated that warning signals are "not grave yet," though the report cautions that circular financing deals and opaque private credit could amplify financial instability. The office noted that a sharp correction in AI-related financial assets could spill over to the broader financial system through tighter credit conditions and forced deleveraging.