Asia to face sustained inflation pressure into 2027, ADB warns
Wars in Europe and the Middle East and a severe El Nino are amplifying price pressures across the continent.
The Asian Development Bank warns that inflation in Asia could remain elevated through 2027 due to conflicts in Europe, the Middle East, and the ongoing war in Ukraine. The reescalation of fighting in Iran and the spread of conflict to Yemen have further strained oil supplies. Severe El Nino weather patterns are also impacting harvests and energy generation across India, Thailand, and other parts of the region.
The ADB projects inflation at 4.2% in 2025 and 3.5% in 2026, both significantly higher than the 3% recorded in 2025. Economic growth is expected to slow to 5% in 2026 from 5.5% in 2025. While subsidies have provided some relief to consumers, the rising energy prices are beginning to affect economies, particularly in countries where food costs are a major part of consumption, such as South Asia.
Several nations may consider further monetary tightening if inflation remains high. The bank anticipates central banks to adjust policy rates gradually toward pre-conflict levels by 2027, but the timing and magnitude of easing will depend on inflation, growth, and external risks.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
