TEHRAN- A new report from the Asian Development Bank (ADB) indicates that the economies of Asian countries will face a slowdown in growth even if oil prices remain relatively stable — a development that highlights the far reaching effects of the war in the West Asia on the region.

The conflict between the United States-Israel and Iran, now in its second month, is sending shockwaves through energy markets and trade routes that millions of Asian businesses and consumers depend on daily.

According to Bloomberg, the international institution stated in its latest economic outlook that the military confrontation could halt the region's post‑pandemic recovery in its tracks. 

As a result, economic growth in developing Asian countries is expected to fall to 5.1% this year, down from an estimated 5.4% last year. 

While the forecasts assume oil prices will return to pre‑war levels by the end of 2026, severe volatility in energy markets remains a significant and unpredictable risk. Masato Kanda, a senior ADB official, warned that Asia's economy is facing a serious test, as rising energy and commodity prices could fuel inflation and tighten financial conditions across the continent.

China and India feel the pressure. China's economy — the main engine of regional growth — is expected to slow from 5% last year to just 4.6%, largely due to weak domestic consumption. 

India is also facing external headwinds, with growth forecast to fall from 7.6% to 6.9%, although strong domestic demand may provide some cushion. 

Meanwhile, inflation in developing Asia is set to rise to 3.6%, driven mainly by higher energy costs. 

Food prices are also climbing because many Asian nations rely on fertilizer imports from the West Asia.

Beyond energy, the war threatens global supply chains in semiconductors, where raw materials like helium and petrochemicals face disruption. 

The tourism industry, still recovering from the pandemic, is also suffering from a drop in international travel. The ADB has urged policymakers to avoid aggressive interest rate hikes or broad price controls, recommending instead targeted fiscal measures and careful management of inflation expectations to weather the storm.