The Asian Development Bank (ADB) has lowered its economic growth forecast for developing Asia and the Pacific and raised its inflation outlook, warning that prolonged disruptions from the conflict in the Middle East are continuing to weigh on the global economy.
In an updated forecast, the ADB now expects regional growth of 4.7% in 2026 and 4.8% in 2027, down from an earlier projection of 5.1% for both years.
Inflation is also expected to rise more sharply, reaching 5.2% this year compared to 3.0% in 2025, before easing to 4.1% in 2027.
The bank said the revision reflects “systemic, long-lasting disruptions” to global energy and trade networks, driven by sustained pressure on oil and gas prices and risks to transport routes.
ADB President Masato Kanda said the region is facing more than temporary volatility.
“We are confronting systemic, long-lasting disruptions to global energy and trade networks, not just temporary volatility,” Kanda said. “ADB will remain an agile partner in protecting the region’s economy.”
The outlook assumes oil prices will average around $96 per barrel in 2026, significantly above pre-conflict levels, before easing to about $80 in 2027.
The bank also outlined a more severe downside scenario in which renewed escalation pushes oil prices higher, potentially slowing regional growth to 4.2% this year and 4.0% next year, while inflation could reach 7.4% in 2026.
The ADB warned that economies heavily dependent on imported energy, tourism, remittances, and external financing are particularly exposed to the ongoing shock.
It recommended targeted fiscal support for vulnerable groups, careful monetary policy to avoid excessive tightening, and measures to reduce energy consumption, including efficiency campaigns and incentives for public transport use.
