Asian Development Bank (ADB)
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April 16, 2026
Economic growth across developing Asia and the Pacific is expected to slow to 5.1% in both 2026 and 2027, down from 5.4% last year, as the conflict in the Middle East disrupts energy markets and trade routes. Inflation is projected to climb to 3.6% this year, driven largely by higher oil prices, before easing slightly to 3.4% in 2027.
If disruptions persist through the third quarter of 2026, growth could slow further to 4.7% while inflation could spike to 5.6%. Our economists note that the region—despite having limited direct trade ties with the Middle East—is highly exposed through global energy markets, shipping lanes, and financial conditions.
The Asian Development Outlook report highlights the urgent need to protect vulnerable households through targeted policies while keeping macroeconomic fundamentals sound.
SOUTHEAST ASIA | Partnerships
ADB Launches $6 Billion Initiative and Institutional Support to Deepen ASEAN Capital Markets
Developing economies need vast amounts of private investment to build the infrastructure their people depend on. Capital markets are a key channel for mobilizing that finance, connecting investors with infrastructure needs.
To strengthen that channel, we plan to mobilize up to $6 billion by 2030 to help Southeast Asia develop deeper, more resilient local capital markets. Stronger capital markets mean countries are better positioned to weather external shocks and better able to fund the infrastructure that drives sustainable growth.
SOUTHEAST ASIA | Energy
ADB Launches New Trust Fund to Accelerate Progress on ASEAN Power Grid
Southeast Asia’s energy demand is expected to triple by 2050, making reliable, affordable, and clean power one of the region’s most pressing challenges.
To help meet it, ASEAN has set an ambitious goal: a fully integrated regional electricity grid—the ASEAN Power Grid—that enables cross-border energy trading and expands access to renewables for nearly 700 million people.
Our new fund will support the early-stage project preparation work needed to turn cross-border energy projects from concept into bankable investments. It builds on ADB’s broader commitment of up to $10 billion over the next decade toward the ASEAN Power Grid.
BLOG | Economic Research
How Asian Economies Can Manage Global Risks
Assuming an early stabilization of the Middle East conflict, Asia and the Pacific is forecast to grow at 5.1% in 2026. But risks are rising.
Drawing on the latest Asian Development Outlook, our economists break down what’s weighing on the outlook and what governments can do about it.
EAST ASIA | Energy
Mongolia’s First Utility-Scale Battery Energy Storage System
A new battery energy storage system is helping Ulaanbaatar meet growing electricity demand and bring more wind and solar power onto the grid. The system is expected to store 58.5 million kWh of renewable energy each year and cut emissions by 46.8 thousand tons annually, supporting Mongolia’s shift to clean, green energy.
PUBLICATIONS | Economic Research
The Middle East Conflict Challenges Resilience in Asia and the Pacific
The ongoing conflict in the Middle East has placed geopolitical tensions and energy market disruptions at the center of the global economic outlook.
Our latest ADO Report explores the implications for developing economies in the region.
