World Bank: Surge in Energy Prices to Slow East Asia-Pacific Economy
Jakarta (ANTARA) - The World Bank predicts that the East Asia and Pacific region will face an economic slowdown in the coming period, amid intensifying global geopolitics that is driving a surge in global energy prices.
In the East Asia and Pacific Economic Update report released on Wednesday (8/4), the region’s growth is projected to decline to 4.2% in 2026, from 5.0% in 2025.
Aaditya Mattoo, the World Bank’s Chief Economist for East Asia and Pacific, stated during a media briefing attended online from Jakarta on Wednesday that the conflict in the Middle East is the main trigger for the rise in global energy prices, which is subsequently pressuring the region’s economic pace.
The increase in energy prices is said to worsen trade barriers, add to international policy uncertainties, and intensify domestic challenges in several countries.
“Measured support for households and businesses can save current jobs, while reviving delayed structural reforms can spur future growth,” said Mattoo.
The report also highlights that the conflict in the Middle East since 28 February has triggered a major shock to global energy prices.
The benchmark natural gas index has surged by up to 90%, while crude oil prices have risen by more than 30%.
The region is also a major supplier of fertiliser, aluminium, and petrochemicals, with Qatar and Saudi Arabia contributing more than 10% of the world’s nitrogen fertiliser exports.
The report notes that the impact of the energy price shock varies by country.
Pacific island nations such as Fiji, Micronesia, Tonga, and Vanuatu are among the most vulnerable, along with major energy importers like Thailand and Mongolia, which face pressures on their trade balances and fiscal constraints.
In contrast, countries with stronger economic buffers, such as Cambodia, Vietnam, and Indonesia, are assessed to have greater resilience to the shock.
This resilience is supported by the presence of strategic reserves, domestic refining capacity, and commodity export revenues that serve as a counterbalance.