Asia-Pacific’s economic outlook under pressure from rising tensions and prices: report
The Asia-Pacific region's economic outlook is under pressure due to rising tensions and prices, with the ongoing Middle East conflict disrupting energy and commodity markets. The region's developing economies are projected to grow by 4.0% in 2026, down from 4.6% in 2025.
The Asia-Pacific region's economic outlook is facing fresh pressure from the ongoing Middle East conflict, which is disrupting energy and commodity markets, and trade and connectivity routes. Rising energy and food prices, along with weaker global demand, are dimming economic growth prospects and increasing the cost of living across the region. Low-skilled workers and low-income households are particularly vulnerable. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) projects developing economies in the region to grow by 4.0% in 2026, down from 4.6% in 2025. To sustain economic performance, the region needs to shift from an export-driven growth approach to stronger domestic and regional demand. The report also highlights the need to strengthen energy resilience through homegrown renewable energy and carefully design transition policies to avoid unintended socio-economic consequences.
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