Fashion
Southeast Asia emerges as a key link in global AI supply chain
Indonesia’s export mix is increasingly aligned with the requirements of an AI-driven digital economy, positioning it as more than just a raw material supplier, JP Morgan said in its 2026 Asia Outlook report.
Southeast Asian economies are aligning with the global artificial intelligence investment cycle, moving beyond commodities and low-value manufacturing, according to JP Morgan.
Indonesia is evolving into an AI-linked exporter, while Vietnam has emerged as a connector economy amid supply-chain shifts.
Pro-growth policies are supporting domestic demand.
Geopolitical fragmentation and supply-chain reconfiguration have further reshaped regional dynamics. Vietnam has emerged as a ‘connector economy’, facilitating trade flows between the US and China as companies diversify production away from China. Competitive manufacturing costs, rising industrial capacity and increasing foreign direct investment have reinforced Vietnam’s role as a regional manufacturing hub.
Meanwhile, inflation across Southeast Asia remains relatively subdued compared with developed markets, supported by stable energy prices. This has allowed several central banks to adopt a more accommodative, pro-growth stance. In Indonesia, the new administration has announced fiscal measures to boost liquidity, accelerate public spending and support other sectors.
Together, easing inflation pressures and supportive policy settings are underpinning domestic demand and anchoring near-term growth prospects, strengthening Southeast Asia’s position within an increasingly AI-centric global economy.
Fibre2Fashion News Desk (SG)