United States (US): The US economy remained resilient through May 2026, although momentum was increasingly uneven across sectors. Real GDP expanded by 1.6% QoQ annualized in Q1 2026 and 2.6% YoY in Q1 2026, supported by exports, private investment, consumer spending, and government expenditure. However, the second estimate was revised down from 2.0%, mainly due to weaker investment and consumer spending. Real final sales to private domestic purchasers rose 2.4% QoQ annualized in Q1 2026, implying that underlying private demand remained constructive.
Euro Area: The Euro Area economy remained fragile in May 2026, reflecting a combination of weak growth momentum, renewed inflationary pressure, and persistent external headwinds. Real GDP contracted by 0.2% QoQ in Q1 2026, reversing the 0.2% QoQ expansion in Q4 2025, while annual growth slowed to 0.3% YoY in Q1 2026. The downturn was mainly driven by weaker external trade and investment, as domestic demand remained only modestly supportive.
China: China’s economy remained uneven in May 2026, with supply-side activity holding up better than domestic demand. The official manufacturing PMI eased to 50.0 in May 2026 from 50.3 in April 2026, signaling a return to the neutral threshold, while the private RatingDog/S&P Global Manufacturing PMI moderated to 51.8 in May 2026 from 52.2 in April 2026. Industrial output rose 4.5% YoY in May 2026, indicating continued resilience in production, particularly in export-linked and higher-technology segments.
Indonesia: Indonesia’s economy faced increasing headwinds in May 2026 as external cost pressures, rupiah depreciation, and weakening domestic demand indicators began to weigh more visibly on economic activity and financial market conditions. Inflation rebounded to 3.08% YoY in May from 2.42% YoY in April, driven by a broad-based pickup across volatile food, core, and administered price components. While headline inflation is still within Bank Indonesia’s target range of 2.5%±1%, the acceleration implies that underlying price pressures remain present despite the temporary moderation recorded in April. Rising food prices, exchange-rate pass-through effects on imported goods, and higher energy-related costs are likely to keep inflation risks elevated in the coming months.
