Regional economies are expected to slow in the second half of 2026 amid uncertainty surrounding US trade policy and persistently high oil prices.
China: The US Operation Economic Outcast strategy has increased the risk of indirect sanctions on China. However, the US has exempted China's major commercial banks from sanctions to avoid a broader escalation of tensions.
Indonesia: The economy grew strongly by 5.45% in the first half of 2026, but growth is expected to moderate in the second half of the year. Bank Indonesia (BI) continues to deploy additional measures to attract capital inflows and maintain currency stability.
Vietnam: The 10% GDP growth target has increased Vietnam's financial vulnerabilities. The trade deficit and limited international reserves have heightened risks to external stability.
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