ADB lowers Asia-Pacific growth view to 4.9% on energy disruptions

The Asian Development Bank (ADB) has lowered its growth forecast for developing economies in Asia and the Pacific for 2026 to 4.9 per cent, citing prolonged disruptions in global energy markets caused by the ongoing conflict in the West Asia.

In its Asian Development Outlook (July 2026), the multilateral lender revised its forecast down by 0.2 percentage points from its April projections. The region had expanded by 5.5 per cent in 2025.

ADB said that while a framework agreement signed in June has helped ease concerns, disruptions in global energy markets are expected to unwind only gradually, resulting in a weaker economic outlook than previously anticipated.

The bank noted that the impact of the conflict has spread beyond energy markets to affect fertiliser supplies, commodity prices and global supply chains, adding to inflationary pressures across the region.

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Reflecting these challenges, ADB has raised its regional inflation forecast to 4.3 per cent for 2026, an upward revision of 0.7 percentage points from its earlier estimate.

The report warned that elevated energy and input costs could continue to weigh on household spending, business investment and industrial activity, even as policymakers across the region seek to support growth while containing inflation.

Despite the downgrade, ADB said developing Asia remains one of the fastest-growing regions globally, although rising geopolitical tensions and persistent supply-side disruptions pose significant risks to the economic outlook.