A conflict in the Middle East has triggered an energy shock that is testing Asia's economic resilience in 2026, with higher oil and gas prices pushing up inflation and widening trade gaps across the region. While Asia remains positioned to lead global growth, the risks have risen significantly, particularly for economies dependent on imported fuel. Concurrently, geopolitical tensions are reshaping global trade patterns, with AI-related exports and Southeast Asian manufacturing expansion emerging as key growth engines. Policymakers face mounting pressure to protect vulnerable populations, maintain price stability expectations, and accelerate reforms that strengthen regional resilience against prolonged energy disruptions.
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