Asia will generate 59 percent of global economic expansion in 2026 as worldwide growth slows to 2.6 percent, down from 2.9 percent last year.

Higher energy prices linked to conflict in the Middle East continue to drag on performance, the United Nations Conference on Trade and Development said in its latest trade and development report. Total trade in goods and services will rise 4 percent in constant prices, lifted primarily by elevated fuel costs after global merchandise and services turnover reached a record $35 trillion in 2025.

India will lead major economies with projected growth of 7.3 percent in 2026. Indonesia follows at 5.2 percent, while China is forecast to expand by 4.5 percent. These three markets form the core of regional momentum as Western demand softens and energy bills rise.

Regional trade networks have adjusted to sharp declines in direct transpacific shipments. Bilateral trade between China and the United States has dropped by more than 20 percent since 2024. Producers in East Asia have absorbed the shift, increasing cross-border volumes with both mainland China and North American buyers to keep consumer goods moving.

Policy barriers have tightened across strategic manufacturing sectors, altering the economics for component suppliers and consumer device assemblers. Trade officials pointed to rising regulatory hurdles that limit cross-border investment and factory expansion.

Export controls, investment screening and supply-chain conditions make strategic sectors harder for new entrants to access

Semiconductors and artificial intelligence hardware represent the largest single driver of merchandise trade across East Asian freight hubs.

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