Asia Economic Outlook 2026: Growth Continues Amid Trade Wars, Tariffs and Supply Chain Shifts

Kimberly Kirkendall’s clients have been waiting for years for a return to stability\db in Asian economies. Many of them hope that “after the next [US Federal Reserve Board] meeting or the next round of talks between China and the US, things will finally stabilise”, said Kirkendall, a consultant specialising in international operations and supply chains and president of consultancy International Resource Development. However, the “roller coaster” of recent years shows little sign of easing as 2026 approaches, she said. Kirkendall and other experts interviewed by Financial Management noted that while China and other Asian economies are still expected to grow, the Asia economic outlook for 2026 will be shaped by ongoing trade wars, shifting global investment patterns, and persistent areas of uncertainty and weakness. “I think people want to believe we’re off the roller coaster with the recent stabilisation in tariff rates,” Kirkendall said. “But I think the volatility will continue.” She added that Southeast Asia, India, and Asia as a whole are still expected to remain major engines of global economic growth. “There is significant investment not only from European, American, and North American companies, but also increasing inter-regional investment,” she said. The China growth forecast for 2026 China remains Asia’s largest economy and a key driver of regional growth. While its outlook is clouded by domestic economic challenges and US tariffs, it could find support from government stimulus measures and continued strength in the technology sector. China’s economic outlook is “resilient, but constrained by structural headwinds,” said Bing Mei, CPA, CGMA, CFO of an investment company listed on HKEX, the Hong Kong Stock Exchange. Most projections indicate China’s GDP may grow by around 4.5% in 2026, down from 2025 levels. The World Bank estimates growth of 4.9% for 2025 and forecasts 4.4% growth in 2026, while China officially reported 5% growth for 2025. “Investor sentiment toward China-based companies remains