Asia's Economic Resilience Is Being Tested by the Energy Shock Asia's Economic Resilience Is Being Tested by the Energy Shock

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Asia's Economic Resilience Is Being Tested by the Energy Shock

April 16, 2026-The region can best cope by protecting vulnerable people, letting prices adjust, anchoring inflation expectations, and accelerating structural reforms
Asia entered 2026 on a strong footing. Despite the region bearing the brunt of US tariffs last April and persistent trade policy uncertainty, growth was resilient in 2025 and trade remained robust.

Now, the war in the Middle East and the ensuing energy supply shock are raising inflation, weakening external balances, and narrowing policy options, underscoring the region’s dependence on imported oil and gas.

Even so, we project Asia to remain the main driver of global growth. The 5 percent expansion last year will moderate to 4.4 percent and 4.2 percent this year and next, according to the reference forecast in the latest World Economic Outlook that assumes the energy shock proves transient. We expect China and India to contribute 70 percent of the region's growth.

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Source: imf.org


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