Asia Pacific faces weaker growth and higher inflation from Middle\nEast crisis, ADB warns<\/p>\n
MANILA: Growth in developing Asia and the Pacific is expected to slow\nthis year as the conflict in the Middle East disrupts trade and energy\nmarkets, the Asian Development Bank said on Friday (Apr 10), with the\nextent of the slowdown dependent on how long the crisis persists.<\/p>\n
ADB President Masato Kanda described the crisis as a \u201cformidable\ntest\u201d for the region\u2019s economic ascent, saying the war has injected new\nuncertainty into an already fragile global landscape.<\/p>\n
Regional growth could ease to 4.7 per cent in 2026 from 5.4 per cent\nlast year, while inflation could rise to 5.6 per cent from 3.0 per cent\nin 2025, if hostilities persist through the third quarter of this year,\nthe ADB said in its latest Asia Development Outlook.<\/p>\n
If the conflict drags on for a year, the region could lose about 1.3\npercentage points of growth over 2026 and 2027, the ADB said.<\/p>\n
Developing Asia and the Pacific comprises 43 economies, ranging from\nChina and India to Georgia and Samoa, but excluding Australia, Japan,\nNew Zealand, Singapore, and South Korea.<\/p>\n
The estimates contrast with the report\u2019s baseline assumptions, which\nwere finalised on March 10 and were based on a shorter one-month\nconflict.<\/p>\n
Under that scenario, growth is expected to slow only modestly to 5.1\nper cent in 2026 and 2027, with inflation projected to rise to 3.6 per\ncent this year, before easing to 3.4 per cent in 2027.<\/p>\n
\u201cScenario analysis in this report focuses on the risk that the Middle\nEast conflict and related energy disruptions last longer than in the\nearly stabilisation scenario, which now appears quite likely,\u201d ADB Chief\nEconomist Albert Park told a press conference.<\/p>\n
FRAGILE CEASEFIRE MIGHT NOT HOLD, ADB\u2019S PARK WARNS<\/p>\n
US President Donald Trump had described the war as a brief, four\u2011week\ncampaign following US and Israeli strikes on Iran on Feb 28, but it\ndragged on into a sixth week of fighting.<\/p>\n
The escalation continued until Trump agreed on Wednesday to a\ntwo\u2011week ceasefire with Tehran, just hours before a deadline imposed by\nthe US President urging Iran to reopen the Strait of Hormuz or face\nsweeping attacks on its civilian infrastructure.<\/p>\n
The war has spread across much of the Middle East, killing thousands\nof people and triggering one of the most severe disruptions to global\nenergy supplies in decades, with the world economy battered by surging\noil and gas prices and mounting inflation fears.<\/p>\n
A temporary halt in fighting and the reopening of Hormuz, the narrow\nwaterway that typically handles about one-fifth of global oil trade,\nwould allow Middle Eastern exporters to ship significant volumes of oil\nthat have been trapped inside the Gulf since hostilities began.<\/p>\n
\u201cThe ceasefire seems fairly fragile, and prediction markets are not\nputting a high probability that it is going to last,\u201d Park said, making\nit difficult to forecast whether it would materially improve the growth\noutlook.<\/p>\n
\u201cPolicy priorities should be to contain inflation and financial\nstress in the short term, while accelerating energy diversification and\nefficiency to reduce future vulnerability,\u201d Park said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/asia-pacific-faces-weaker-growth-and-higher-inflation-from-middle-east-crisis-adb-warns-1775793064", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }