Following relatively uneven growth in 2025 due to tariffs, 2026 is likely to see improved prospects economies is the resilient labour market, with negotiations, South Korea and China resuming negotiations to extend their existing bilateral free trade agreement, and China establishing more specific cooperation frameworks with the UK and A consistent theme that has emerged across Asia Pacific is the resilient labor market, with pass-through of tariff-driven costs, encouraging unemployment rates generally remaining below 1o-year averages. Labor market resilience helps support wage growth, which in turn underpins private consumption growth and providing firm foundation for domestic demand. Alongside that, the A.1. boom continues to drive corporate example. Investment in machinery and equipment, and semiconductor is expected to rise, as Asia Pacific has become the manufacturing hub for technology products. Despite resilient growth prospects, some potential downside risks cannot be neglected. Geopolitical tensions, structural demand from A.1. and strategic inventory hoarding have driven commodity prices higher, particularly for precious and industrial metals. Many base metal prices have surged producers are likely to transfer these increased costs to consumers, resulting in inflation that may prove stickier than expected. That has already encouraged central banks to shift from broad easing to a wait-and-see approach. Japan will continue to be an exception, with a high likelihood of further rate hikes over the course of 2026, as the Bank of Japan revises its full-year inflation forecast upward, indicating increased confidence in sustained price growth. Market consensus expects one OPINION PIECE. PLEASE SEE IMPORTANT DISCLOSURES IN THE ENDNOTES.