Global Commodities - Wildcards 2H‘26:1970s Oil Shock Rerun, and Other Wildcards

Research evidence excerpt

Global Commodities - Wildcards 2H‘26:1970s Oil Shock Rerun, and Other Wildcards

Emerging Markets Economic Outlook & Strategy - Artificial Intelligence and the

EM Growth Divide

Flagship

There are only a few potential EM winners (Taiwan, Korea, Singapore) in the US-led

AI capex cycle, but if the 1990s IT revolution were any guide, prospects for future

productivity gains could accrue more to the “users” versus “producers”. Here too,

EM looks relatively disadvantaged vs DM, as AI adoption prospects remain highly

correlated with per capita GDP through digital-infra/skills, and occupational

structure’s readiness for AI disruption. China’s lower-cost “frugal stack” could

accelerate AI diffusion across EM but its benefits are likely to be unevenly

distributed to a few. It is too early to assess labor-market effects, but abundance

of young job-seekers in Africa & Asia is a challenge. AI could narrow the skills-gap

between DM and EM, but overall effects are unlikely to be large enough vs

displacement and commodification of lower skilled tasks. India’s business

process outsourcing services export growth remains very resilient, while

Philippines’ is slowing sharply.it is

Johanna Chua | Ernesto Revilla | Gina Schoeman | Yuanliu Hu | Luis E Costa, CFA

Measures of AI diffusion (Microsoft Q1 2026 AI Select EM – Electronics Exports (seas adj;

Diffusion Report) are highly correlated to per 4Q22=100)

capita GDP

index, Selected EM Electronics Exports

4Q22=100

KR+TW

MX

ASEAN

250 4

IL

CEE-4

CN

PH

May-22 May-23 May-24 May-25 May-26

China Economics - Politburo Preview: Incremental Support, No Pivot

The July Politburo meeting (held on the 30th in 2025) is a key forum for mid-year

policy recalibration, set against a backdrop of AI-driven market volatility and a

26Q2 GDP miss.