Solid growth, easing cycles drawing to a close

The economic outlook across much of Asia has improved recently, prompting modest upward revisions to our 2026 GDP growth forecasts. Strong demand for AI-related products will continue to lift exports and offset the impact of US tariffs. The domestic demand picture is more mixed: consumer spending should grow steadily, supported by low inflation and recent policy rate cuts, but fiscal consolidation will act as a headwind in many countries. We are forecasting further rate cuts in Korea, the Philippines, Thailand, and Indonesia, but easing cycles are approaching their end in most countries. We forecast only one additional cut in India and expect rates to remain unchanged in Taiwan, Vietnam and Malaysia.