A day after the World Bank warned that global growth is proving resilient but structurally weak, its regional data reveals where that resilience is now doing the heaviest lifting—and where the cracks are forming. East Asia and the Pacific (EAP), long the world’s most reliable growth engine, is still expanding faster than any other major region. But according to the January 2026 Global Economic Prospects update, that momentum is clearly moderating.

Economic growth in East Asia and the Pacific slowed to an estimated 4.8% in 2025, down from 5.0% in 2024, but stronger than the World Bank had projected mid-year. The smaller-than-expected drag from higher trade barriers and policy uncertainty helped cushion the slowdown, reinforcing a theme running through the global report: firms and supply chains are adapting faster than policymakers anticipated.  

China Slows, But Does Not Stall

China remains the central force shaping the region’s trajectory. Growth there eased to an estimated 4.9% in 2025, supported by fiscal stimulus that helped shore up consumption. Exports held up better than expected, boosted by front-loading ahead of tariff implementation and increased shipments to non-U.S. markets.

Yet the structural headwinds are unmistakable. Investment growth stayed weak as the property sector deteriorated further, dragging on confidence and capital formation. Looking ahead, the World Bank expects China’s growth to slow to 4.4% in 2026 and 4.2% in 2027. While these forecasts are 0.4 percentage point higher than the Bank’s June projections—reflecting additional fiscal support, resilient exports, and relatively more stable trade policy—the underlying constraints remain.

Subdued consumer confidence, a softer labor market, and the ongoing real-estate slump are expected to cap any near-term rebound. Manufacturing investment is also projected to slow as uncertainty persists around policies aimed at correcting supply-demand imbalances in key sectors. Over the medium term, structural challenges such as slowing productivity growth, high debt levels, and population aging continue to weigh on China’s potential growth.  

Southeast Asia Holds Up—Selectively

Outside China, growth across East Asia and the Pacific eased to an estimated 4.6% in 2025, down from 4.8% the year before. Even so, this outcome exceeded earlier forecasts thanks to easier financial conditions, resilient private consumption, and export front-loading.

Some economies benefited disproportionately from artificial-intelligence-driven demand for semiconductors. Malaysia, the Philippines, and Viet Nam all saw stronger export performance tied to the global race to expand AI-related capacity. Viet Nam, in particular, stands out: growth is estimated at 7.2% in 2025 and projected at 6.3% in 2026 before rising to 6.7% in 2027—by far the fastest pace among larger regional economies.

Indonesia remains a picture of stability, with growth holding at around 5.0% in 2025 and projected to edge up to 5.2% by 2027. Thailand, by contrast, continues to lag, with growth estimated at just 2.0% in 2025 and projected to dip further to 1.8% in 2026 before a modest recovery.  

A Region Adjusting to a New Trade Reality

The World Bank expects growth across East Asia and the Pacific to slow to 4.4% in 2026 and 4.3% in 2027, largely due to China’s deceleration. Excluding China, however, the outlook is slightly more encouraging: growth is projected to dip to 4.5% in 2026 before recovering to 4.7% in 2027 as domestic policy support offsets the waning contribution of net exports.

Compared with June projections, regional growth in 2026 has been revised up by 0.4 percentage point. The reason is not a revival of global trade, but rather a smaller-than-expected impact from higher trade barriers and a growing ability of firms to reconfigure supply chains.

Still, uncertainty remains elevated. Despite bilateral trade agreements between key regional economies and the United States, shifts in relative tariff rates could continue to reshape supply chains across the region. Export growth is expected to slow as the effects of earlier front-loading unwind, even if the drag proves less severe than previously feared.  

Pacific Islands: Normalization Brings Slower Growth

In the Pacific Island subregion, growth rose to an estimated 4.2% in 2025, but is expected to ease over the forecast horizon as mining activity and tourism normalize. For economies that experienced sharp post-pandemic rebounds, the challenge now is sustaining momentum once those temporary boosts fade.

Risks Tilt to the Downside—But Opportunity Remains

Risks to the East Asia and Pacific outlook remain skewed to the downside. A renewed escalation of trade tensions, tighter global financial conditions, or a sharper-than-expected slowdown in China would quickly reverberate across the region. Political uncertainty, social unrest in some economies, and exposure to natural disasters add further fragility.

On the upside, the World Bank notes that firms’ ability to adapt to higher trade barriers could again blunt the economic impact of protectionism. The region’s relatively high digital readiness also positions it to capture productivity gains from artificial intelligence investment and adoption—an advantage that could prove decisive if global growth remains scarce.

Taken together, the regional picture reinforces the message from the global outlook released a day earlier: the world economy is not collapsing, and Asia is still growing faster than almost anywhere else. But resilience is increasingly coming from adaptation rather than expansion. For East Asia and the Pacific, the question is no longer whether it can carry global growth—but how long it can do so while slowing itself.