Beyond macro indicators, the effects may spill into sectors such as tourism and inward remittances.
ADB Flags Risk: Prolonged Energy Disruptions Could Hit Asia Growth, Raise Inflation
A prolonged disruption in global energy supplies could push parts of Asia into a phase of slower growth and higher inflation, the Asian Development Bank has cautioned, highlighting the economic risks from the ongoing West Asia conflict.
At the core of the concern is the region’s heavy dependence on imported fuel, which makes it vulnerable to sustained price shocks and supply bottlenecks. According to the assessment, if these disruptions continue for over a year, economic growth across Asia-Pacific could take a noticeable hit in 2026–27, while inflationary pressures may intensify sharply.
The impact is unlikely to be uniform. Southeast Asian economies are seen facing the steepest slowdown in growth, whereas South Asia could experience the most pronounced rise in inflation. Beyond macro indicators, the effects may spill into sectors such as tourism and inward remittances, both of which are sensitive to global uncertainty.
Albert Park noted that such conditions could force developing economies into a difficult balancing act between sustaining growth and controlling inflation. He stressed the importance of shielding vulnerable groups from price shocks.
The report suggests that governments should focus on stabilising markets rather than artificially suppressing prices, while central banks remain alert to inflation risks. It also underscores the need for energy conservation measures in the event of prolonged shortages.
(With Inputs frpm PTI)
