Asia's economic divide forecast to widen in 2026

Suthiphand Chirathivat, professor emeritus of economics at Chulalongkorn University in Thailand, said members of the Association of Southeast Asian Nations offer many advantages to potential investors such as lower labor costs, geographic proximity to China, and improved infrastructure.

ASEAN has become a key hub for tech investments, with some of the world's biggest technology companies venturing in the region for the past few years, he said.

The Asian Development Bank has forecast regional growth for developing Asia-Pacific economies to slow to 4.6 percent in 2026, compared with the projected 5.1 percent growth in 2025. The Manila-based lender attributed this year's economic growth to resilient consumption, while market diversification helped limit the impact of steep US tariffs. However, the full impact of the tariffs will be felt in 2026, with mostly non-tech exports taking the hit.

The GDP of the East Asian region — including two of Asia's biggest economies, China and South Korea — is expected to expand by 4.1 percent. ADB says stronger domestic demand and reduced trade uncertainty after recent talks with the US could support China's GDP growth next year.