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22 July 2026 / Report
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Copy LinkThe brief improvement in shipping conditions following the June ceasefire between the US and Iran quickly faded as renewed hostilities in July reignited concerns over disruptions of energy flows through the Strait of Hormuz. Higher energy prices will continue to feed into inflation, weakening currencies and tightening financial conditions in several energy-importing economies. Governments will be under renewed pressure to stabilize economies amid the expected prolonged headwinds.
The AI investment cycle remains the region's strongest growth driver, supporting exports, capital expenditure, and industrial production across Taiwan, South Korea, Singapore, Malaysia, and Japan. As a result, the regional outlook is becoming increasingly bifurcated: technology-intensive manufacturing economies continue to outperform, while economies more reliant on domestic consumption, tourism, or imported energy face growing headwinds from higher costs, weaker demand, and tightening financial conditions.
Consumer inflation, year-on-year
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