The Asian Development Bank (ADB) has lowered its growth forecast for developing Asia and the Pacific economies to 4.9% for 2026 compared to 5.5% growth in 2025. This is a reduction of 0.2 percentage points from April projections.
The Asian Development Bank (ADB) said in its latest economic outlook, released today, that the Middle East conflict has had a greater impact on the region's economic outlook than previously expected because of prolonged disruptions in energy markets.
Despite these challenges, the ADB maintained its regional economic growth forecast of 5.1% for 2027, expecting economic activity to recover as pressures on energy markets gradually ease.
According to the Asian Development Outlook July 2026, disruptions in global energy markets are expected to ease gradually despite the framework agreement signed in June. The report said the conflict has affected not only energy prices but also fertilizer prices, other commodities, and global supply chains, keeping inflationary pressures elevated.
The ADB now expects regional inflation to reach 4.3% in 2026, up from 3% in 2025 and 0.7 percentage points higher than its April forecast. However, its inflation forecast for 2027 remains unchanged at 3.4%.
ADB Chief Economist Albert Park said that if the framework agreement is fully implemented, it could help stabilize global energy markets. However, he warned that the pace of recovery remains highly uncertain and that significant downside risks remain.
