- 1Q Asia GDP likely strong, backed by robust trade and April demand data.
- AI and green tech boom lifts exports; price rises haven’t hurt demand.
- S Korea/Taiwan exports up 40–50% YoY; chips drive record valuations.
- Malaysia/Singapore/Vietnam post 15–35% export growth via supply chains.
- Risks: Iran-war energy shock, inflation spillovers, possible demand destruction.
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COMMENTARY: Asia’s exports buoyancy
Asian economies are likely to report a constructive set of 1Q GDP numbers, given the strong trade data available already. The strength in the cycle is extending well past the first quarter, with early trade data from April showing regional external demand going strength to strength.
Granted, there is plenty of doom and gloom among policy makers and citizens about the rising cost of energy and lingering uncertainty around the Iran war. But concurrently, the market for electronics and green tech has never been more buoyant. The AI wave related buying frenzy has broadened to every aspect of the electronics ecosystem, with substantial price rises having had no impact on the surging quantity demanded.
It’s not just about electronics; signs of overall demand resiliency are evident through the first four months of 2026 data. Exporters are seeing strong order books across the board. US retail sales are strong, investment cycle is picking up worldwide, and the war has added further impetus to procuring products around the energy ecosystem, from generators to batteries, EVs to defence equipment.
China’s January- April trade data is a good case in point. For the largest exporter in the world, mid-teen exports growth is striking to say the least. Even exports to the US, after a whole year of intense trade war, were up 11%yoy in April.
For S Korea and Taiwan, the two electronics stalwarts of the region, export outturns are breaking records month after month, registering growth rates of 40-50%yoy. Memory and compute chips are leading the way, causing some of the companies at the top of the pack to go past trillion-dollar valuations.
Malaysia, Singapore, and Vietnam are also having banner moments, with exports growth in the 15-35% range. Their synchronised rise in exports underscores the integrated nature of the regional supply chain, with the AI cycle lifting all electronics boats.
There are some laggards. India and Indonesia are not touched by the heady momentum in the region. In both cases, businesses are reporting a steady weakening of sentiments. Rising energy prices ought to help Indonesia’s export figures from April onward, we think, but India’s outlook does not look promising at this moment. With 15% of its exports Middle East bound, the lingering uncertainty around the Strait of Hormuz is a considerable headwind for India’s exporters. Not being a part of the region’s extensive electronics supply chain does not help matters either.
There are some risks to Asia’s export outlook for the remainder of the year. For starters, lagged impact of the energy shock from the Iran war is something to watch out. Second round inflation effects, as energy prices percolate through the system, are also in the pipeline. Combine this with the exceptionally strong demand for electronics, plenty of inflation risks remain on the horizon. These developments could end up causing demand destruction; but they may also lead to more nominal revenues for exporters.
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