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15 September 2026 / Report
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Copy LinkAsia-Pacific economies continue to prove more resilient than expected despite geopolitical tensions and disruption around the Strait of Hormuz. Strong exports remain the critical buffer, with the AI investment cycle driving demand for semiconductors, electronics, and related infrastructure. However, this increasingly reflects two-speed economies, where export and industrial strength masks weaker domestic demand.
Pressures are nevertheless building. Oil prices approaching $100 per barrel are raising costs, while inflation and currency pressures have prompted several central banks to tighten policy. Governments have also relied on expansionary fiscal policy, subsidies, and household support to cushion the energy shock, but sustaining these measures will become increasingly difficult if oil prices remain elevated. Growth therefore continues to be highly dependent on the AI cycle, while weak consumer confidence remains a key vulnerability.
Consumer Confidence Index 2026 by country, normalized
Consumer confidence remains subdued across much of the region as higher food and energy costs erode purchasing power, even where headline inflation remains relatively contained. The underlying challenges differ significantly, but both strong and weak economies face similar pressures. Taiwan’s AI-driven boom, for example, has yet to spread evenly across the broader economy, while the Philippines faces more acute pressures from high inflation and weak growth. In Japan, real w
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