Energy Prices Drive Regional Headwinds
The ADB warned that higher energy and fertilizer prices are worsening trade balances and increasing fiscal spending pressures across the region. The bank’s revised outlook assumes oil prices averaging around $96 per barrel in 2026, well above the pre-conflict average of $69 per barrel. The IMF now expects oil prices to rise nearly 32% this year, pushing global consumer price inflation to 4.7% in 2026. morningstar.com aol.com adb.org
Currency depreciation across several Asian economies has compounded the pain, making energy imports more expensive and squeezing household budgets. morningstar.com
Philippines and Cambodia Among Hardest Hit
The Philippines faces a particularly challenging outlook. The ADB trimmed its Philippine growth forecast to 3.8% for 2026, making it the fourth-slowest growing economy in Southeast Asia. The IMF separately cut its forecast for the country to 3.9% from 4.1%, still within the government’s 3.5% to 4.5% target but reflecting weakened consumption and delayed investments. bworldonline.com businessmirror.com.ph manilatimes.net bworldonline.com
Cambodia received one of the steepest downgrades. The IMF now projects growth will slow to 3% in 2026, down from 5.3% in 2025, as higher energy prices, softer external demand, and continued weakness in the real estate sector drag on activity. Inflation in Cambodia, which averaged 2.5% in 2025, is projected to reach 5.6% this year. In response, the Cambodian government unveiled a $1.24 billion stimulus package focused on job creation, vocational training, and energy management. cambodiainvestmentreview.com english.news.cn kiripost.com phnompenhpost.com
The IMF’s mission chief for Cambodia, Kenichiro Kashiwase, warned that financial sector vulnerabilities, real estate weakness, and asset-quality deterioration remain key risks, though he noted the riel currency has remained broadly stable. english.news.cn
