ADB Cuts Asia's Economic Growth Forecast Amid Prolonged Middle East Crisis Impact
JAKARTA, KOMPAS.com - The Asian Development Bank (ADB) has cut its economic growth projections for developing Asia and the Pacific region due to the prolonged impact of the conflict in the Middle East, which has exceeded initial estimates.
Persistent disruptions to energy supplies and trade routes are now pressuring economic activity while triggering a surge in inflation across the region.
In a special economic outlook update released on Wednesday (29/4/2026), ADB forecasts growth in the region at just 4.7% in 2026 and 4.8% in 2027.
ADB President Masato Kanda stated that this revision reflects major changes in the regional economic landscape due to the expanding impact of the conflict.
“Our revision of the outlook represents a significant downward adjustment for growth and a sharp increase in inflation following this special update to reflect the deepening crisis,” Kanda said, quoted from ADB’s official website.
According to him, the region now faces systemic disruptions with potential long-term effects on energy and global trade networks, rather than mere temporary volatility.
ADB, Kanda added, will continue to monitor rapidly evolving risks and accelerate support to help regional economies cope with mounting pressures.
The ADB’s projection revision is primarily driven by the persistent surge in energy prices.
In its latest baseline scenario, ADB estimates average oil prices at $96 per barrel throughout 2026, far higher than the $69 per barrel average in January and February 2026 before the conflict escalated.
This rise in energy prices poses new pressures on many developing Asian countries that rely on fuel imports.
Higher energy costs are driving domestic price pressures, narrowing governments’ fiscal room, and exacerbating risks to sectors sensitive to operational costs.
ADB projects regional inflation to jump to 5.2% this year, compared to 3% last year.
Inflationary pressures are deemed most acute in countries heavily dependent on energy imports, remittances, tourism, or external financing.
In its update, ADB notes that the economic impact of the conflict is lasting longer than initially anticipated.