The ongoing war in the Middle East has triggered an energy shock, driving up oil and gas prices across Asia and the Pacific, exacerbating inflation and widening trade deficits. Asia's economy remains resilient, entering 2026 on solid footing despite prior trade tensions, but the conflict tests this strength and limits policy responses in fuel-import-dependent nations. Regional growth is still projected to lead globally, though prolonged shocks heighten risks amid geopolitical tensions. Urgent policy measures focus on protecting vulnerable populations, allowing price adjustments, maintaining confidence, and advancing energy reforms for resilience.
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