HSBC’s latest regional economic forecast projects that GDP growth in the Asia ex-Japan region will moderate to around 4.5% in 2026, down from an estimated 4.9% expansion in 2025, with slower activity anticipated across several major economies. This outlook reflects concerns about weakening export demand and uncertainties around the contribution of artificial intelligence (AI)-related investment and hardware growth to broader economic performance.
According to HSBC’s forecast, based on commentary from HSBC economists reported by Finews Asia, China’s economy is expected to expand at about 4.6% in 2026, slightly lower than its roughly 5% growth last year, and slower growth is also anticipated in other regional markets such as Hong Kong, India, and Malaysia.
This slowdown projection contrasts with forecasts of relative strength in economies like Australia, New Zealand, and Indonesia, which may see more resilient expansion.
HSBC’s chief Asia economist attributed the projected slowdown partially to incomplete rotation from export-led growth toward stronger domestic demand, noting that weaker external demand, influenced by factors such as elevated tariffs and softer hardware investment cycles, could dampen growth momentum if private consumption and investment do not sufficiently accelerate.
While export dynamics and global uncertainty have moderated growth prospects, HSBC analysts maintained a positive view on Chinese equities due to substantial unused household savings estimated at roughly $23 trillion, which they see as a potential source of domestic demand and capital for investment.
The forecast reflects a broader context of uneven recovery and structural challenges across Asia’s economies. In China, recent official GDP data show growth slowing toward multi-year lows, underscoring the region’s mixed macroeconomic performance entering 2026.
Market participants also remain focused on the role of AI and technology investment as both a potential growth driver and a source of valuation risk, with some technology stock valuations having risen significantly, increasing sensitivity to shifts in the AI investment narrative.
HSBC’s projections align with other international forecasts that suggest continued, if slower, expansion across the Asia region, emphasizing the need for stronger domestic demand, investment, and structural reforms to support medium-term growth amid evolving global economic conditions.
