Asian Central Banks Shouldn't React Aggressively to AI Boom
Dow Jones
1 hour ago
0821 GMT - Asian central banks shouldn't react aggressively to the strong artificial-intelligence boom, but should instead continue to watch for signs that the phenomenon is generating inflationary pressures, Capital Economics' Gareth Leather says in a note. The surge in AI-related goods demand is driving economic growth in Taiwan, Singapore, Malaysia and South Korea. However, inflation has remained subdued in those economies, because the sectors driving the AI boom are capital rather than labor intensive. As such, rapid wage growth in these industries has had limited effect on overall demand, he says. CE expects Taiwan and Malaysia to remain on hold throughout 2026-2027. Singapore is also likely to remain on hold, while Korea could raise rates by another 25 bps.
At the request of the copyright holder, you need to log in to view this content
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.