India is projected to lead major Asia-Pacific economies in 2026, with a GDP growth of 6.6 percent and inflation at 4.2 percent, according to the Mastercard Economics Institute (MEI). This robust growth will be fueled by strong domestic demand, supported by monetary easing, tax reforms, GST rationalization, and lower global commodity prices.

The MEI's annual economic outlook for 2026 highlights that favorable demographics, rapid digitization, and technological advancements continue to position India among the fastest-growing major economies. This will drive expansion in global capability centers and Tier 2–3 cities. Tourism is also emerging as a key growth driver, boosting external stability and supporting local businesses, with destinations like Goa, Rishikesh, and Amritsar attracting experiential and spiritual travelers.

Across the Asia-Pacific region, consumer spending is expected to underpin resilience amid trade shifts and accelerating AI adoption. Consumers are projected to remain tech-enabled and value-conscious, prioritizing meaningful moments like travel and live experiences while remaining price-sensitive for essentials. Both outbound and intra-regional tourism are gaining momentum, reinforcing the sector's role as a key economic engine.

David Mann, chief economist for Asia Pacific at Mastercard, noted that Asia Pacific has demonstrated remarkable resilience during a period of tariff uncertainty and shifting supply chains. He added that microeconomic conditions for consumers across much of the region are improving in 2026. Mann emphasized that businesses must stay attuned to these underlying demand trends.

The Asia-Pacific region is expected to maintain stable economic growth in 2026, even as the global economy adjusts to tariff volatility, rapid advances in artificial intelligence, and shifting consumer behavior. Globally, MEI forecasts real GDP growth to ease slightly to 3.1% in 2026, compared with an estimated 3.2% in 2025. The global outlook is shaped by a mix of fiscal stimulus, rapid technological adoption, geopolitical tensions, and supply-chain realignments.

Accelerating AI adoption, reflected in an AI Enthusiasm Index score of 8, underscores India's readiness to harness the next wave of productivity gains and reinforces its role as a key driver of Asia-Pacific's economic outlook.

Other key forecasts for the Asia-Pacific region include:

• China: Growth projected at 4.5%, driven by consumption recovery, targeted stimulus, and rising demand for "new consumption" categories such as wellness and lifestyle upgrades.
• Sri Lanka: Expected to grow 3.7% as private consumption, rising tourism receipts, and accommodative monetary policy sustain its recovery.
• Bangladesh: Forecast to grow around 5%, with easing inflation and remittance inflows helping households despite ongoing structural challenges.
• Japan: Expected to grow 1.0%, supported by rising real incomes, accommodative policy, and investment in AI and energy security.

Mann also pointed out that despite the global realignment of trade, the Asia Pacific region remained central to the global supply chain, with India, ASEAN, and China playing an increasingly important role as companies restructured their sourcing and investment.

Mann cautioned that while Asia Pacific's outlook is broadly positive, the region faces a complex set of risks in 2026, including ongoing trade fragmentation, tariff pressures, external shocks, and disparities in technological progress. He stressed that adaptability, digital readiness, and alignment with evolving consumer trends will be critical for businesses in 2026.

The MEI's 2026 outlook covers 12 markets across Asia and Oceania and incorporates public data and anonymized Mastercard transaction insights.