AI boom is helping global economy avoid sharper slowdown and powering Asia’s export surge

The Artificial Intelligence (AI) boom has helped the global economy avoid a sharper downturn, fuelling an investment surge and boosting exports from Asia’s techn-heavy economies, according to Moody’s Analytics.The firm said a steady stream of new AI chatbots, agents and coding assistants has rallied stock markets up and attracted increasing investment into chips, computing infrastructure, and power.The Asia-Pacific region in general, and Taiwan in particular, have emerged as major beneficiaries of the AI boom due to their role in producing semiconductors and other technology hardware.”In the Asia-Pacific region, where chips and other hardware are made, the boom has fed straight into production and exports,” the report highlighted.Moody’s data shows exports across the region climbing well above earlier trends, driven mainly by electronics and machinery. The gains span China and Hong Kong, Taiwan, the ASEAN-5 economies and Vietnam, Japan and South Korea, and India.Taiwan stood out, with GDP growth near 9% in 2025. Moody’s expects a similar pace in 2026, backed by the island’s leadership in advanced chip production.A “K-Shaped” world economyWhile AI is powering some sectors, Moody’s warned the boom is also deepening a “K-shaped” divide in the global economy.Industries and economies tied closely to AI investment are thriving, while those outside its reach are grappling with weak demand, geopolitical tensions and trade friction.Even with this support, Moody’s expects global growth to slow to 2.5% in 2026 before rising slightly to 2.8% in 2027. The firm cautioned that geopolitical risks, stretched asset prices and market volatility could still tip the slowdown into a deeper downturn.First Published: Jul 16, 2026 2:00 PM IST

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