China's economy expected to slow in 2026 due to Iran war

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Standard & Poor's predicts a slowdown in China's economy in 2026, as weak domestic demand and instability in the Middle East, coupled with the temporary easing of US tariffs, will hinder strong growth momentum.

Meanwhile, growth in the Asia-Pacific region is expected to remain stable, with technology-driven economies and sectors outperforming. However, rising energy prices are a burden, and continued energy market volatility remains a major risk.

There is little room for monetary easing, and rising inflation driven by energy prices and currency depreciation pressures will keep central banks in the Asia-Pacific region on high alert.