Asia-Pacific Economies Weather Oil Shock Thanks to AI Boom

Asia-Pacific economies have largely weathered the oil shock caused by US and Israeli military strikes on Iran, thanks to government spending, domestic energy supplies, and a boom in AI and semiconductors.

Ahead of this year's first half, Joshua Lewin, head of investment strategy at JP Morgan Private Bank, said that the region has become 'a central part of the global AI supply chain', with AI products and semiconductor exports driving regional growth.

China's economy expanded 4.7 percent in the first half of this year, while Singapore's economy rose 6.1 percent in the same period. South Korea's GDP increased 1.8 percent in the first quarter.

Australia has managed to cushion the impact of steep oil prices as it is one of the world's largest exporters of liquefied natural gas. In contrast, India and Indonesia have been more severely affected by higher domestic inflation rates due to their reliance on imported oil and gas.

India, Asia's third-biggest economy and one of the world's biggest crude oil importers, is expected to see its GDP growth slow to 7.0 percent in the three months to June from 7.8 percent in the preceding quarter.