The independent think tank and cultural centre’s message is that Asia remains one of the world’s most compelling growth region. This, even as geopolitics, trade policy and interest rate uncertainty intensify, making the 2026 outlook one of the most challenging to produce, according to Michael Lawrence, chief executive of Asia House.
“The Asian century is no longer a projection,” said Dominic Barton, chair of Asia House. “It’s already a reality.”
In his view, Asia’s innovation is “systemic”, embedded across supply chains, factories, logistics systems and increasingly public services.
Driving forces
The report’s forecasts underline the growth gap between high-momentum emerging Asia and slower North Asia. India and Vietnam are projected to grow above 6%, the Philippines and Indonesia, over 5%, and China, around 4.6%.
According to Matilda Townsend, Asia House analyst and lead author of the report, Asia’s outlook remains “overwhelmingly positive” and driven by three forces: strong domestic demand, rapid digitalisation, and accelerating investment in technology sectors.
Confidence also appears to be improving. Around 75% of respondents in Asia House’s business perception survey described the outlook as “positive” or “very positive”, up from around 62% last year, suggesting that many Asian economies have adapted to elevated tariff and geopolitical risk without losing growth momentum.
Technology is one of the report’s clearest investment themes. It highlights ongoing expansion of e-commerce, accelerating adoption of artificial intelligence, and a region-wide push to secure positions in semiconductor supply chains.
A key catalyst for Southeast Asia is the expected finalisation of a framework on digital economy this year, designed to harmonise rules on data flows and localisation and make cross-border digital services trade easier. The report cites expectations that the agreement could help lift digital economy in the ten-member Association of Southeast Asian Nations or ASEAN towards US$2 trillion by 2030.
Local insight
Johan Mahmood Merican, a senior official at Malaysia’s finance ministry who joined the session from Kuala Lumpur, broadly welcomed Asia House’s 4.8% growth forecast for the country.
He attributed domestic resilience to policy stability and fiscal reform, citing progress in reducing Malaysia’s fiscal deficit from 5.5% in 2022 to 3.8% in 2025, alongside subsidy reforms and measures to widen the tax base. He said these steps have helped reinforce investor and consumer confidence.
He also highlighted the demand-side picture: private consumption growth of around 5%, low unemployment, and improving wage growth. On the investment front, he pointed to a surge in technology-related infrastructure, particularly data centres, describing an influx of major global players as a meaningful contributor to construction activity and confidence.
He struck a reassuring tone on inflation, noting relatively modest price pressures and expectations that inflation will remain below 2% despite potential oil price volatility.
He said Malaysia does not welcome a more protectionist global trading environment, but stressed the importance of supply-chain “symbiosis”, pointing to the country’s relevance in the electronics ecosystem and the need to keep trade relationships diversified.
He said digital transformation is central to Malaysia’s push to move up the value chain, with data centres and more seamless cross-border digital payments seen as enabling infrastructure for deeper ASEAN integration.
Key threats
Townsend said more than half of businesses surveyed identified US foreign and trade policy as the biggest threat to Asia’s outlook, with tariff volatility expected to persist.
Geopolitical flashpoints and domestic political pressures are also rising across parts of the region, reinforcing the case for scenario planning rather than single-track forecasts.
This year, Asia is expected to rely less on pure export leverage and more on domestic demand, regionalisation of trade and supply chains, and technology-enabled productivity.
The key takeaway from Asia House is that while Asia remains the world’s most dynamic growth arena, it is also one where policy, geopolitics and innovation cycles move fastest, and where selectivity will matter more than ever.
