The Asian Development Bank (ADB) has sharply downgraded its economic growth forecasts for developing Asia and the Pacific while raising inflation projections, citing worsening and prolonged disruptions caused by the ongoing Middle East conflict.
In a special update to its economic outlook, the ADB warned that escalating tensions in the Middle East are continuing to drive up energy prices, tighten global financial conditions, and slow economic activity across the region.
ADB President Masato Kanda said the revised outlook marks a major downgrade to growth expectations and a significant rise in inflation forecasts as the crisis deepens.
“We are confronting systemic and long-lasting disruptions to global energy and trade networks, rather than temporary volatility,” he said, adding that the ADB would continue to respond swiftly to emerging risks and strengthen support for regional economies.
The ADB now expects the region’s economy to grow by 4.7% in 2026 and 4.8% in 2027, down from the 5.1% growth projected for both years in its April 2026 Asian Development Outlook report.
Inflation across developing Asia and the Pacific is now forecast to rise to 5.2% this year, compared to 3% recorded last year, before easing slightly to 4.1% in 2027.
According to the ADB, the economic impact of the conflict has persisted longer than initially expected, with ongoing risks to energy production and key transport routes continuing to pressure oil and gas prices. Economies heavily reliant on imported fuel, tourism, remittances, and external financing are expected to face the greatest challenges.
The updated forecast assumes average oil prices of around $96 per barrel in 2026, significantly higher than the pre-conflict average of $69 per barrel seen in January and February. Prices are expected to moderate to around $80 per barrel in 2027.
The ADB also warned of a more severe downside scenario if the conflict escalates further. In such a case, where oil prices surge again and remain elevated, regional growth could slow to 4.2% this year and 4% next year, while inflation could climb as high as 7.4% in 2026.
Verité Research has appointed Yanitra Kumaraguru as its new Head of Legal Research
Verité Research has appointed Attorney-at-Law Yanitra Kumaraguru as the Team Lead of its Legal Research Division, which focuses on analysing and strengthening Sri Lanka’s legal frameworks and their implementation.
Last month, Kumaraguru led a public seminar at Verité Research’s VThink! platform on the ethical implications of autonomous weapons in warfare.
An Attorney-at-Law of the Supreme Court of Sri Lanka, Kumaraguru also holds a Master of Laws (LL.M.) degree from Harvard University. She previously served for seven years as a Lecturer at the Faculty of Law, University of Colombo, and has extensively consulted and published on issues related to gender, technology and law, human rights, and humanitarian law.
Her appointment comes as Verité Research expands its legal research initiatives amid growing opportunities for constitutional and institutional reform in Sri Lanka.
Under her leadership, the Legal Research Division will focus on areas including technology and the law, access to justice, climate and the law, business and human rights, and civil, political, economic, social, and cultural rights, while applying a strong intersectional approach to its research.
ADB cuts Asia-Pacific growth forecast sharply as Middle East conflict disruptions intensify
