Asia Pacific faces weaker growth and higher inflation from Middle East crisis,

Growth in developing Asia and the Pacific is expected to slow this year as the conflict in the Middle East disrupts trade and energy markets, the Asian Development Bank said, with the extent of the slowdown dependent on how long the crisis persists.



ADB President Masato Kanda described the crisis as a "formidable test" for the region's economic ascent, saying the war has injected new uncertainty into an already fragile global landscape.



Regional growth could ease to 4.7 per cent in 2026 from 5.4 per cent last year, while inflation could rise to 5.6 per cent from 3.0 per cent in 2025, if hostilities persist through the third quarter of this year, the ADB said in its latest Asia Development Outlook.



If the conflict drags on for a year, the region could lose about 1.3 percentage points of growth over 2026 and 2027, the ADB said.



Developing Asia and the Pacific comprises 43 economies, ranging from China and India to Georgia and Samoa, but excluding Australia, Japan, New Zealand, Singapore, and South Korea.