ADB Warns West Asia Conflict Could Lower Asia-Pacific Growth as Asian Governments Roll Out Emergency Relief Measures

On March 26, 2026, the Asian Development Bank released a report warning that if energy market disruptions from the West Asia conflict last more than one year, economic growth in developing Asia and the Pacific could be lowered by up to 1.3 percentage points over 2026-2027, while inflation could rise by 3.2 percentage points. The report identified higher energy prices, supply chain and trade disruptions, and tighter financial conditions as the main transmission channels, with developing Southeast Asia and the Pacific facing the most severe growth impacts and South Asian economies seeing the largest inflation increases.

In contrast, flagship reports released at the Boao Forum for Asia on the same day projected Asian economic growth of 4.5% in 2026, with Asia remaining the world’s primary growth engine and intra-regional trade dependence rising against the trend. In response to the crisis, Asian governments have rolled out emergency relief measures.

South Korea plans a 5 trillion won emergency bond buyback to stabilize its bond market and is drafting a 25 trillion won supplementary budget. Japan has tapped 800 billion yen in reserve funds to subsidize gasoline prices and is considering intervening in crude oil futures markets. New Zealand is providing temporary weekly support of NZ$50 for low-income families. ADB Chief Economist Albert Park recommended that policies focus on containing market stress and protecting the most vulnerable while adopting measures to improve longer-term resilience.