Global Economy — 2026-04-13
Asian Development Bank Warns Middle East Conflict Could Cut Asia-Pacific Growth by 1.3 Percentage Points
The ADB forecast Asia-Pacific growth will moderate to 5.1% in 2026 and 2027 under an early stabilization scenario, down from 5.4% in 2025. Under prolonged disruption, growth could fall to 4.7%. If the Middle East conflict extends 12 months, the region could lose 1.3 percentage points of growth across both years. The bank projected regional inflation rising to 3.6% this year from higher energy prices. The ADB called the prolonged Middle East conflict "the single biggest risk to the region's outlook."
Analysis
The ADB's scenario analysis provides the most concrete macroeconomic quantification of the Iran war's global cost. A 1.3 percentage point growth loss under extended conflict translates to hundreds of billions in foregone output across the Asia-Pacific alone. The bank's characterization of the Middle East conflict as "the single biggest risk to the region's outlook" displaces US-China trade friction from that position for the first time since 2019. The ADB relies on its own modeling; the IMF and World Bank have published less specific estimates, making cross-institutional comparison difficult.
The ADB's scenario analysis provides the most concrete macroeconomic quantification of the Iran war's global cost. A 1.3 percentage point growth loss under extended conflict translates to hundreds of billions in foregone output across the Asia-Pacific alone. The bank's characterization of the Middle East conflict as "the single biggest risk to the region's outlook" displaces US-China trade friction from that position for the first time since 2019. The ADB relies on its own modeling; the IMF and World Bank have published less specific estimates, making cross-institutional comparison difficult.