![\"Figure](\"https:\/\/www.europesays.com\/germany\/wp-content\/uploads\/2026\/05\/figure-3.png\")
<\/p>\nJapan<\/p>\n
\u201cThe Japanese economy is expected to maintain moderate growth in 2026,\u201d notes Deutsche Bank Research Chief Economist for Japan, Kentaro Koyama. He explains that while the impact of US tariff policy on Japan is anticipated to be limited, \u201crising wages and decelerating inflation are likely to support household consumption\u201d.<\/p>\n
Headline inflation is projected to fluctuate significantly due to upcoming government measures to curb price increases, but core-core inflation is forecast to slow to around 2% by mid-2026. Fiscal policy faces increasing risks of expansion, and monetary policy exhibits a stronger bias towards continued easing. Future risks include a weaker yen, a fiscal risk premium, and geopolitical uncertainties.<\/p>\n
\u201cChinese leaders have become more confident in the country\u2019s technological capabilities and economic resilience\u201d
Yi Xiong, Chief Economist, China, Deutsche Bank Research
\nChina<\/p>\n
According to Deutsche Bank Research Chief Economist for China Yi Xiong, China\u2019s economic growth is projected to slow to 4.5% in 2026 due to \u201canti-involution\u201d policies and diminishing returns from consumer stimulus, though inflation is expected to improve with consumer price inflation reaching 1.5% and producer price inflation) turning positive in H2 2026.<\/p>\n
His takeaway from the 15th Five-Year Plan, which set policy priorities for 2026\u201330, is that Chinese leaders have become more confident in the country\u2019s technological capabilities and economic resilience, despite observing a more challenging external environment for the coming years.<\/p>\n
He notes three new priorities that stand out:<\/p>\n
Accelerating technological application\/commercialisation by industries;
\nStrengthening economic ties with the outside world; and
\nImproving people\u2019s wellbeing through increased public spending.<\/p>\n
\u201cWe think these policies will benefit innovative private firms in emerging industries and boost domestic consumption, especially in the services sector.\u201d Monetary policy, he adds, \u201cwill remain stable with continued fiscal expansion\u201d. Robust external demand \u2013 driven by strong exports, easing US-China tensions, and accelerated RMB internationalisation \u2013 is also anticipated.<\/p>\n
<\/p>\n
Figure 3: China\u2019s GDP growth is projected at 4.5% in 2026<\/p>\n
Source: Deutsche Bank<\/p>\n
India<\/p>\n
While India\u2019s growth momentum has held up better than expected in 2025, despite the tariff and other geopolitical risks, it is not as strong as what is reflected by the headline GDP growth trend, notes Deutsche Bank Research\u2019s India Chief Economist, Kaushik Das. Real GDP growth looks set to moderate to 6.4% year-on-year (yoy) in 2026, from what is looking like a 7.3% outturn in 2025 \u2013 and then rise back to 6.7% yoy in 2027. CPI inflation \u2013 while heading for a 2.2% outturn in 2025 is forecast to rise to 3.9% yoy in 2026 and a further 4.4% yoy in 2027.<\/p>\n
Given this growth-inflation mix, the team expect one more 25bps rate cut from the Reserve Bank of India (RBI) in this cycle, with an extended pause thereafter through 2026. Das explains, \u201cIf growth momentum slips sharply, then the RBI could consider cutting rates by another 25bps in 2026. We expect the RBI to start rate hikes from Q2 2027, taking the repo rate back to 6.25% by H1 2028. We forecast the fiscal deficit to stabilise around 4.5% of GDP for the full years of 2027 and 2028 at the central government level and around 7.5% of GDP on a consolidated basis.\u201d<\/p>\n
While a favourable trade deal may result in some appreciation of the rupee in the near term, the team expects the rupee to maintain a depreciating bias, likely ending 2026 at 90 vs. the USD and then depreciating further to 92 by the end of 2027. But overall, they expect the underlying momentum to improve over the next few years, \u201caided by a supportive US-India bilateral tariff deal (which should see US tariff coming down below 20%, from 50% currently) and lagged favourable impact of generous fiscal and monetary support announced in 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"Japan \u201cThe Japanese economy is expected to maintain moderate growth in 2026,\u201d notes Deutsche Bank Research Chief Economist…\n","protected":false},"author":2,"featured_media":20828,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21213],"tags":[699,23551,21214,95,1242,3523,6776,3012,23552,629],"class_list":["post-20827","post","type-post","status-publish","format-standard","has-post-thumbnail","category-deutsche-bank","tag-artificial-intelligence","tag-central-bank","tag-deutsche-bank","tag-economy","tag-inflation","tag-infrastructure","tag-interest-rate","tag-investment","tag-tariff","tag-trade"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/20827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=20827"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/20827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/20828"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=20827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=20827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=20827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}