-- The Asian Development Bank sharply downgraded its economic growth forecasts for developing Asia and the Pacific while raising inflation projections, citing prolonged disruptions from the Middle East conflict that are driving up energy prices and tightening financial conditions.
The bank now expects regional growth of 4.7% in 2026 and 4.8% in 2027, down from its earlier forecast of 5.1% for both years. Meanwhile, inflation is projected to accelerate to 5.2% this year before slowing to 4.1% in 2027, according to the latest ADB report.
ADB said the revisions reflect sustained pressure on oil and gas prices, with crude expected to average about $96 per barrel in 2026, significantly higher than pre-conflict levels, weighing on fuel-importing economies.
Under a more severe scenario, growth could ease further to 4.2% this year and 4% next year, while inflation may spike to 7.4% in 2026, the bank added, urging targeted fiscal support and measured monetary responses.