Asia enters 2026 with slowing growth, softer exports and uneven consumer demand, but ING says the region remains supported by tech-driven investment, lower inflation and the prospect of broad rate cuts.
The bank’s annual outlook identifies six forces that will shape next year’s trajectory, ranging from tariff realignments to supply chain shifts and currency dynamics.
ING expects Asia ex-China GDP growth to slow to 3.4% in 2026 after a stronger-than-expected 2025, when Taiwan and Singapore outperformed on the back of surging semiconductor and AI-related exports.
Consumer-led economies such as India and the Philippines lagged as weak sentiment kept retail spending soft.
Large fiscal packages in Japan and South Korea should make them outliers next year, offsetting a broader loss of export momentum.
Tech investment is set to remain the region’s growth anchor. AI-linked goods rose more than 20% in 2025, and ING expects continued strength as supply chains shift and computing demand stays firm.
Traditional manufacturing is likely to remain under pressure as China’s overcapacity weighs on pricing and investment decisions across Southeast Asia. Services exports such as travel and digital services should accelerate as goods trade slows.
Tariff resets between the US and Asia narrow the gap with China, reducing some of the region’s relative advantage, but ING says supply chain diversification will not reverse.
India and Indonesia are set to gain from lower US food tariffs, while India and Singapore benefit from exemptions on generic drugs and targeted pharmaceutical categories.
Source : Investing.com