Asia's economy faces testing times in 2026 as the Middle East war triggers an energy shock with surging oil and gas prices. This is fueling inflation, widening trade deficits, and constraining fiscal responses in fuel-import-dependent nations. Despite prior resilience to trade tensions, regional growth now hinges on navigating these geopolitical strains. Trade shifts toward high-tech sectors and ASEAN diversification offer some buffer amid heightened security risks.
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