00:00Growth in developing Asia and the Pacific is expected to slow this year
00:04as the conflict in the Middle East disrupts trade and energy markets.
00:09According to the Asian Development Bank, regional growth could ease to 4.7% in 2026 from 5.4%
00:17last year,
00:18while inflation could rise to 5.6% from 3.0% in 2025.
00:28These are the figures if hostilities persist through the third quarter of this year,
00:32the ADP said in its Asian Development Outlook.
00:35However, if the fighting drags on for a year,
00:37the region could lose about 1.3% of growth over 2026 and 2027, the ADP said.
00:45Developing Asia and the Pacific consists of 43 economies ranging from China and India to Georgia and Samoa,
00:52but excluding Australia, Japan, New Zealand, Singapore and South Korea.
00:57The estimates contrast with the report's baseline assumptions,
01:01which were finalised on March 10th and were based on a shorter one-month conflict.
01:06But what US President Donald Trump had described as a brief four-week campaign,
01:10beginning February 28th, instead dragged into six weeks of fighting.
01:15With the US and Iran recently agreeing to a two-week ceasefire,
01:19this could allow for more Middle Eastern exporters to ship significant volumes of oil
01:23that have been trapped inside the Gulf through the Strait of Hormuz since hostilities began.
01:29However, events since March 10th suggest that a prolonged conflict is increasingly likely.
01:36The two-week ceasefire announced yesterday provides some optimism
01:40and we certainly hope the conflict can be resolved as soon as possible.
01:44But that ceasefire still appears quite fragile.
01:47In a scenario in which disruptions to energy markets persist into early next year,
01:53kind of a worst-case scenario,
01:55regional growth would be lower by 1.3 percentage points over the period 2026 to 2027,
02:02and inflation would be 3.2 percentage points higher.
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