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Asia Faces Sustained Inflation Until 2027 Amid Global Conflicts, El Niño: ADB Warns
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Moneycontrol•23-09-2026, 07:38
Asia Faces Sustained Inflation Until 2027 Amid Global Conflicts, El Niño: ADB Warns
- •The Asian Development Bank (ADB) warns that Asia will experience sustained inflation pressure until 2027, driven by ongoing conflicts in Europe and the Middle East, and a severe El Niño.
- •Wars in Iran, Yemen, and Ukraine are disrupting crude, refined product, and grain shipments, while El Niño threatens harvests from India to Thailand and impacts hydropower and waterways.
- •ADB chief economist Albert Park states that risks are tilted to the downside, with further conflict escalation or worse El Niño impacts potentially increasing inflation and slowing growth.
- •The ADB forecasts inflation for developing Asia-Pacific at 4.2% this year and 3.5% next year, both above 2025's 3%, and expects economic growth to slow to 5% in 2026.
- •Several Asian economies, including Bangladesh, India, Indonesia, Pakistan, the Philippines, and Vietnam, may need further monetary tightening this year if inflation persists, with potential rate cuts in 2027.
Key Questions Answered
The Asian Development Bank warns that wars in Europe and the Middle East, along with a severe El Niño, are amplifying price pressures across Asia by choking crude and refined product supplies, disrupting grain shipments, and threatening harvests.
The ADB forecasts inflation for the developing Asia-Pacific region at 4.2% this year and 3.5% next year, up from 3% in 2025. Meanwhile, economic growth is expected to slow down to 5% in 2026, dropping from 5.5%.
Several economies have scope for further monetary tightening this year if inflation persists, including Bangladesh, India, Indonesia, Pakistan, the Philippines, and Vietnam.
