Bangkok, October 16 — Asian Development Bank President Masato Kanda warned on Thursday that inflation in the Asia-Pacific region could persist and intensify due to mounting global uncertainties, speaking during the 2026 annual meetings of the International Monetary Fund and the World Bank Group in Bangkok. Kanda cited a confluence of risk factors driving the outlook: soaring energy prices linked to turmoil in the Middle East, the worsening El Nino phenomenon, and increasing severity of natural disasters tied to climate change.
He emphasized that Asian economies remain heavily dependent on crude oil and natural gas supplies from the Middle East, a vulnerability that amplifies exposure to external shocks. In response to these pressures, the ADB has provided $5.6 billion in financial support to member countries, Kanda noted, without specifying the breakdown of the funding or recipient nations.
He also highlighted that rising long-term interest rates, primarily in developed economies, are increasing repayment burdens for developing nations with significant dollar-denominated debt, a trend that could strain fiscal sustainability across the region. Despite the headwinds, Kanda expressed cautious optimism about the outlook for private sector engagement, stating he hopes the ongoing meetings will encourage more Japanese companies to expand operations into Asia. He did not name specific sectors or firms expected to increase investment.
The ADB’s latest economic outlook projects growth in emerging economies across the Asia-Pacific to slow to 5.0% in 2026, down from 5.5% in 2025. Kanda presented this figure as part of the institution’s assessment of near-term risks, attributing the deceleration to the combined impact of external volatility and domestic structural challenges.
While Kanda did not detail policy recommendations for member governments, he underscored the importance of international coordination in addressing inflationary pressures and debt vulnerabilities. He framed the IMF and World Bank meetings as a critical platform for aligning financial support with reform incentives. The ADB president refrained from commenting on the monetary policies of individual central banks or the fiscal stances of specific governments, including those of the United States or China.
His remarks remained focused on regional trends and multilateral responses. Looking ahead, Kanda indicated that the ADB will continue to monitor commodity price movements, climate-related disruptions, and global financial conditions as key determinants of regional stability. He suggested that future lending and technical assistance may be adjusted based on evolving inflation trajectories and debt sustainability indicators.
No specific timeline was given for when the ADB might revise its growth or inflation forecasts, nor did Kanda outline contingency scenarios should energy prices or interest rates exceed current projections. The institution’s next regional economic update is expected following the conclusion of the annual meetings.
