Claire d’Izarny-Gargas: Hello, everyone. Welcome to this new episode of ‘MacroWaves’, focusing on the rise of AI and the energy shock in emerging economies. Spring 2026 saw mounting risks, with the war in Iran, the closure of the Strait of Hormuz and soaring energy prices. Yet, against all expectations, emerging economies withstood the shock remarkably well.
To understand this resilience, I’m joined today by Lucas Plé and Hélène Drouot, both economists in the Emerging Economies team at BNP Paribas Economic Research. Hello to you both.
Lucas Plé: Hello.
Hélène Drouot: Hello, Claire.
Claire d’Izarny-Gargas: Lucas, let’s start with an overview. First up, let’s discuss something surprising: against this backdrop of geopolitical tensions causing a sharp rise in energy prices, aren’t you maintaining fairly robust growth forecasts for emerging economies in 2026?
Lucas Plé: That’s right. In our baseline scenario, we are forecasting average growth of nearly 4% for 2026 as a whole, following 4.5% in 2025. Admittedly, this is a slowdown, but it is still only a slight one, as the shock has been absorbed particularly thanks to stronger macroeconomic buffers than in 2022.
Claire d’Izarny-Gargas: Before going into detail about the drivers of this growth, let’s look at what could have been a major obstacle: the energy crisis and its inflationary consequences.
Claire d’Izarny-Gargas: Hélène, this point has surprised many observers. The price of a barrel of Brent crude jumped by 25% between February and August. Why haven’t we seen a surge in inflation?
Hélène Drouot: A number of factors are at play. Firstly, as early as the end of April, oil prices fell for a first time with the prospect of the Strait of Hormuz reopening. They have rebounded since July due to ongoing tensions despite a ceasefire agreement, but they have not returned to the levels seen between March and May. In addition, the rise in prices has had relatively little impact on global food prices thus far. This is important to note, because in emerging markets, food accounts for an average of 30% of the consumer basket, compared with less than 15% for energy. As a result, median inflation rose only from 3.2% year-on-year in February to 4.3% in June. It even slowed to 3.9% in July.
Claire d’Izarny-Gargas: Lucas, you also highlight the role of structural reforms, which have, in some cases, helped with managing external imbalances better compared with 2022. Is this particularly the case in Egypt?
Lucas Plé: Absolutely. Egypt entered the crisis with greater credibility, thanks to its fiscal consolidation reforms and a more flexible exchange rate. This has enabled it to absorb the shock on foreign exchange liquidity better. Furthermore, the economic recovery has held up well, and growth will remain above 4% for the 2026 fiscal year.
Claire d’Izarny-Gargas: One reason why emerging economies have been able to deal with the energy crisis is that a new growth driver has emerged to support economic activity: artificial intelligence.
Claire d’Izarny-Gargas: Lucas, you say that the rise of AI is a ‘positive growth shock’ that is offsetting the negative effect of rising energy prices.
Lucas Plé: That’s right. In emerging economies, much of the growth in 2026 has been driven by major AI expansion thus far. Global demand for AI-related chips, data centres and electronic goods has helped to sustain growth in many exporting countries, particularly in Asia.
Claire d’Izarny-Gargas: Hélène, South Korea is the most striking example of this trend…
Hélène Drouot: Yes, the country is one of the best positioned to capitalise on this positive growth shock. Its semiconductor exports more than tripled year-on-year in June, driven by chips that are essential for AI. South Korea even posted a record current account surplus in the first quarter, estimated at nearly 15% of GDP. The country is now investing in an integrated AI ecosystem – mainly made up of data centres, robotics and advanced materials – to strengthen its position.
Lucas Plé: It is also worth noting that AI can act as a driver of industrial growth where domestic demand is weak. In China, the AI sector already accounts for 22% of total exports, which has supported manufacturing activity despite rising energy costs.
Claire d’Izarny-Gargas: So, AI is helping to boost growth in a number of emerging economies, but what is the impact of AI on their external accounts? How is AI managing to offset rising energy prices in the trade balance?
Claire d’Izarny-Gargas: Lucas, how can AI support external accounts?
Lucas Plé: The first mechanism relates to the value of exports. Prices for AI-related goods are reaching record highs. In South Korea, for example, the average price of exported semiconductors has more than doubled in a year. As a result, Taiwan and South Korea have seen the value of their exports surge by 47% in the first half of 2026. This is generating foreign-currency earnings that more than cover the additional cost of energy bills.
Hélène Drouot: Yes, and the same applies to the prices of critical raw materials. The AI boom requires metals such as copper, which has risen in price by 42% this year. This has enabled some Latin American countries to offset the rise in their hydrocarbon imports, as has been the case in Chile.
Claire d’Izarny-Gargas: However, this increased reliance on technology brings us to a crucial issue: what would happen if this growth driver, which is currently expanding rapidly, was to ground to a halt suddenly?
Claire d’Izarny-Gargas: Lucas, you identify a major risk to growth: a potential downturn in the technology cycle. What exactly are you concerned about?
Lucas Plé: The risk is a potential sharp slowdown in investment in data centres and digital infrastructure. Given that global growth is currently heavily concentrated around AI-related technology, a downturn of this type would directly affect the real economy.
Claire d’Izarny-Gargas: Hélène, which Asian countries are most exposed to this technological risk?
Hélène Drouot: Industrialised economies are at the forefront. Taiwan and South Korea are the most vulnerable due to the importance of the tech sector as a growth driver. In Taiwan, tech-related net exports contributed 10 percentage points to GDP growth in the first quarter of 2026. In South Korea, the polarisation between the tech sectors and the rest of the economy is already grounds for caution.
Lucas Plé: China is also highly exposed. Its production of AI-related goods is largely for export. Therefore, a downturn in the AI sector would have a negative impact on its export performance, as well as on its growth, which is driven more by the export sector than by domestic demand, which has remained sluggish so far. But beyond China, other countries, such as Vietnam, Malaysia and Thailand, are currently benefiting from the AI boom, and a slowdown in global demand would affect their economic growth.
Claire d’Izarny-Gargas: Hélène, could the rise in trade in AI-related goods exacerbate some macroeconomic vulnerabilities?
Hélène Drouot: Absolutely. In both Thailand and Vietnam, the trade balance shifted from a surplus in 2025 to a deficit in the first half of 2026. As they specialise in assembly and packaging, these countries are bearing the brunt of rising energy and electronic-input costs without capturing the same added value as their neighbours to the north, which are further up the AI value chains.
Claire d’Izarny-Gargas: To sum up, resilience has been the watchword of the last six months, but it is based on a balance between technological opportunities and energy challenges.
Claire d’Izarny-Gargas: We’re coming to the end of this podcast, where we’ve seen that emerging economies are currently navigating between an energy crisis and a technological revolution. The situation does not come risk-free for some of them.
Hélène Drouot: Yes, the resilience of emerging economies is not uniform. Countries with a strategic advantage in AI or critical minerals are faring best. But that does not mean these countries are completely in the clear. For instance, Chile, Mexico, Peru and even South Korea need to keep a close eye on their public finances.
Lucas Plé: And there are other specific cases as well. The economies of the Middle East are still facing a highly unusual situation. Thus far, the region has held up well, but some countries in the region are faring better than others. This is the case with Saudi Arabia, which has redirected 70% of its exports via the Red Sea to bypass the blockade of the Strait of Hormuz. But there is still a great deal of uncertainty, in the short term at least, while the ceasefire is not fully respected. Things are also very uncertain in the medium term, as this conflict reveals that the Gulf countries’ economic development model is fragile and will need to be adapted to a new geopolitical landscape.
Claire d’Izarny-Gargas: Thank you, both, for your insights.
Lucas Plé & Hélène Drouot: Thank you, Claire.
Claire d’Izarny-Gargas: You can find our full analyses on our website, in the latest issue of EcoPerspectives dedicated to Emerging Economies for July, which contains detailed reports on China, South Korea, India, Indonesia, Brazil, Mexico, Colombia, Poland, Romania, Turkey, Saudi Arabia and Egypt.
Thank you for following us, and see you again soon for a new episode of ‘MacroWaves’.
EcoPerspectives - Emerging Economies | 3rd quarter of 2026, as of July 13, 2026– Economic Research – BNP Paribas
