The Asian Development Bank (ADB) has downgraded its economic growth outlook for Asia and the Pacific to 4.7% for 2026, down from 5.1%, primarily due to ongoing disruptions in West Asia affecting energy prices and tightening financial conditions. Inflation forecasts have also surged to 5.2%, reflecting the prolonged impact of regional conflicts on economic stability. ADB President Masato Kanda emphasized that the current situation indicates systemic disruptions rather than temporary fluctuations. The bank anticipates regional growth at 4.7% this year and 4.8% next year, with inflation projected to rise to 5.2% this year before easing to 4.1% in 2027. ADB's analysis suggests that oil prices are expected to average around $96 per barrel in 2026, significantly higher than pre-conflict levels. In a more severe scenario, growth could slow to 4.2% and inflation could spike to 7.4% if conflicts escalate further. ADB has proposed several policy responses, including allowing higher energy prices to encourage conservation, targeted fiscal support, and measures to curb energy demand.