April 11, 2026 | 08:25 pm
TEMPO.CO, Jakarta - The Asian Development Bank (ADB) expected the economic growth of developing countries in the Asia-Pacific region to slow to 5.1 percent in 2026 and 2027 from last year's 5.4 percent.
This was conveyed by ADB's Chief Economist, Albert Park, in a written statement, citing Middle East conflict and trade uncertainty as major factors. Meanwhile, regional inflation is projected to rise to 3.6 percent in 2026 and 3.4 percent in 2027, from 3 percent last year.
"The forecasts are informed by assumptions finalized on 10 March under exceptionally high uncertainty, envisaging an early stabilization scenario for the conflict in the Middle East. Evidence since then points to a higher likelihood of more persistent disruptions," the statement read, as quoted from Antara.
ADB saw the Asia-Pacific region facing a challenging and uncertain global environment in a relatively strong position, supported by strong domestic demand, a stable labor market, and higher public infrastructure spending.
The April 2026 Asian Development Outlook (ADO) also noted that prolonged conflicts in the Middle East pose the biggest risk to projections for the Asia-Pacific region amid the risk of high energy and food prices for a longer period, as well as tighter financial conditions.
The re-emergence of trade policy uncertainty adds to the risks, the ADB said, which necessitates governments to pursue appropriate macroeconomic policies to maintain growth and control inflation through targeted policies to protect vulnerable households.
The report also warned that prolonged conflicts and escalation in the Middle East could affect economic activities through several channels, including price hikes, shipping disruptions, and financial volatility.
Most developing economies in the Asia-Pacific region have experienced reduced growth projections in 2026 and 2027, despite strong household spending and solid demand for artificial intelligence (AI)-related goods.
China's growth forecast is down to 4.6 percent in 2026 and 4.5 percent in 2027, from 5 percent in 2025 due to ongoing property market declines and slowing export growth restraining economic activity.
Meanwhile, ADB projects India's growth to slow to 6.9 percent this year from 7.6 percent last year, before picking up to 7.3 percent next year. This is driven by the strength of domestic consumption.
ADB also predicts the Pacific economy to decline from 4.2 percent in 2025 to 3.4 percent in 2026 and 3.2 percent in 2027. Meanwhile, oil prices are projected to remain high in the near term but could gradually drop again if geopolitical tensions ease. "The recent surge in energy prices and potential disruptions to fertilizer markets linked to the conflict in the Middle East could lead to inflationary pressure on global food prices," Park said.
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