Asia-Pacific economies are likely to suffer a slowdown in growth this year, as rising costs linked to the US-Israel war on Iran combine with lingering trade uncertainty to threaten global trade flows, according to forecasts by top international organisations.
The predictions come despite China showing resilience in the first quarter by
posting better-than-expected growth of 5 per cent and finance minister Lan Foan last week stressing that the world’s second-largest economy would remain an engine for global growth.
The International Monetary Fund (IMF) projected in its World Economic Outlook report on Tuesday that growth in emerging and developing Asia would reach 4.9 per cent this year, down from 5.5 per cent in 2025. It expects growth to ease in China as well.
“The global economy has, to date, withstood a series of shocks, yet another one – this time a military conflict engulfing the Middle East since the end of February – is testing this resilience,” the report said.
Days earlier, the Asian Development Bank also forecast economic growth in developing Asia and the Pacific to slow this year. It predicted the region would achieve 5.1 per cent growth in 2026, down from 5.4 per cent last year, with economies “weighed down by the conflict in the Middle East and continuing trade uncertainty”.
The lender forecast China’s economic growth at 4.6 per cent this year, down from 5 per cent in 2025.
The World Bank expects East Asia and Pacific regional economic growth to hit 4.2 per cent in 2026, down from 5 per cent last year, “as the energy shock due to the Middle East conflict compounds the adverse impact of elevated trade barriers, global policy uncertainty and domestic economic difficulties”.
It tipped China’s growth to reach 4.2 per cent this year.