Asia-Pacific growth set to slow as tariffs, geopolitical risks raise economic pressure
ECONOMIC growth across the Asia-Pacific region is expected to moderate to 4.2% this year from 4.3% in 2025 before slowing further to 3.6% in 2027, as higher prices, tighter monetary policy, geopolitical tensions and trade disruptions weigh on demand....
The Asia-Pacific region's economic growth is projected to decelerate to 4.2% in 2026 from 4.3% in 2025, before further slowing to 3.6% in 2027, according to Moody's Analytics. The slowdown is attributed to factors such as higher prices, tighter monetary policy, geopolitical tensions, and trade disruptions. However, the artificial intelligence (AI) boom is providing a buffer against a more pronounced slowdown, as it fuels strong demand for semiconductors and other technology products, particularly in Taiwan, South Korea, China, and parts of Southeast Asia.
These tech-driven economies are benefiting from robust global demand, while others with greater exposure to energy costs, weaker consumption, and trade disruptions face more challenges. Central banks across the region are tightening monetary policy moderately, but could adopt more aggressive measures if the conflict in West Asia persists and oil prices remain high.
Despite the risks, the prolonged conflict in West Asia is expected to ease, with the resulting inflationary surge likely to be temporary. Nonetheless, the region's longer-term outlook remains subdued, with economic growth projected to decelerate to 3.6% in 2027 due to the mounting impact of higher prices and tighter financial conditions.
Written by urgent.news from The Vibes's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
