DBS Bank has recently published a fascinating deep-dive into the economic outlook for Asia, looking ahead to 2026. The report identifies a number of reasons for the region’s unexpected strength in the face of global trade headwinds. The report underscores the important role that foreign direct investment (FDI) plays in other countries, like Malaysia, Singapore and Vietnam. All of these countries have already reached all-time highs in their infrastructure investment. According to the bank’s research team, positive monetary conditions are supercharging the region’s economy. Most of the recent warmth is due to an absence of food and fuel inflation, which produces a somewhat idyllic backdrop for growth.
The report emphasizes a concept called “TOTUS,” or Trade Outside the United States. This practical resilience-building acronym highlights a key ingredient. Meanwhile, Asian countries are marking their own distinct courses. Continuing to inform their re-calibration of investment flows, hope for the period of growth to come is rising.
According to the DBS Bank research team, “As separate paths are charted, investment flows get recalibrated. The likes of Malaysia, Singapore, and Vietnam are already seeing record FDI; we see more potential in 2026 and beyond.”
At the beginning of the year, prospects looked grim for global trade and the multilateral rules-based order. As the year approaches its end, this fast-growing region exhibits encouraging evidence of more hope than hype. The new report claims that Asia has successfully navigated this economic storm proving resilience through the year.
“A year that began with unprecedented fear about global trade and multilateral rules-based order is ending with guarded relief. It has turned out to be a test of resilience that the global economy in general and trade intensive Asia has passed well so far.” – DBS Bank research team
Interestingly, the bank’s findings show that trade restrictions imposed by the U.S. have had a more benign impact than originally feared. Tariffs have indeed been rolled out but they differ in terms of rates, exemptions and grace periods and are still subject to ongoing negotiation. That changing global landscape hasn’t slowed U.S. consumers’ hunger for imports. Because of that, a number of Asian countries are experiencing very robust export growth to the U.S.
“The appetite of U.S. consumers has not been dented by these developments, it seems.” – DBS Bank research team
Yet as the region approaches 2026, the report expresses an overarching feeling of less nervousness across the region. A roaring stock market has investors flush with cash, fueled by the favorable monetary and fiscal conditions and expectations of sustained growth.
“The region is stepping into the new year with reduced anxiety.” – DBS Bank research team