Asian economies face ‘formidable test’ as Middle East conflict drags on: ADB
Even if oil prices stabilise in the coming months, developing Asia-Pacific countries will still take years to recover, the bank says
“Developing Asia and the Pacific’s economic ascent faces a formidable test,” ADB President Masato Kanda said in the report. “While the region’s direct exposure is limited, it remains vulnerable to rising prices for energy and other commodities, which fan inflation and tighten financial conditions.”
If the conflict drags on for a year, the region could lose about 1.3 percentage points of growth over 2026 and 2027, the report said.
Developing Asia and the Pacific comprises 43 economies, ranging from China and India to Georgia and Samoa, but excluding Australia, Japan, New Zealand, Singapore and South Korea.
The Manila-based lender forecasts China’s growth will ease to 4.6 per cent this year from 5 per cent in 2025, with private consumption seen remaining subdued in Asia’s largest economy.