Against the backdrop of increasing geopolitical shocks and uncertainty in the global economy, Asia continues to be regarded as a key force supporting worldwide growth. During the 2026 International Monetary Fund Spring Meetings, the IMF's Asia and Pacific Department released its latest regional outlook, noting that although growth momentum has moderated, Asia remains the primary engine of global economic expansion.

Krishna Srinivasan, Director of the Asia and Pacific Department, stated at a press briefing that Asian economies started 2026 on a solid footing, supported by lower-than-expected U.S. tariffs, improved exports driven by the technology sector, and accommodative financial conditions. These factors have partially offset the energy shocks stemming from conflict in the Middle East.

However, he pointed out that Asia's high energy intensity and heavy reliance on Middle Eastern fuel leave the region continuously exposed to spillover risks from conflicts. Overall data indicate that Asia still contributes the most to global growth. The IMF forecasts regional economic growth will slow from 5% in 2025 to 4.4% in 2026, and further decline to 4.2% in 2027. Despite this deceleration, the IMF explicitly stated that "Asia remains the main driver of global growth."

The IMF highlighted that Middle East tensions have driven up oil and gas prices, with Asia—being highly energy-dependent—experiencing particularly significant impacts. Data show that oil and gas usage in Asia accounts for about 4% of GDP, roughly double that of Europe. Meanwhile, net oil and gas imports in the region represent approximately 2.5% of GDP, reaching nearly 8% in economies such as Singapore and Thailand.

Rising energy prices are affecting the economy through multiple channels. On one hand, they are pushing up inflation, with regional inflation expected to rise from 1.4% in 2025 to 2.6% in 2026. On the other hand, they are weakening external balances and tightening financial conditions, further constraining policy space.

The IMF warned that if energy shocks intensify, the impact would become more pronounced. Under an adverse scenario, if oil prices in 2026 rise by approximately 60% above previous forecasts and remain elevated in 2027, cumulative output in major Asian economies could decline by about 0.8% by 2027. In a more extreme scenario, output losses could approach 2%.

In response to this situation, the IMF emphasized that short-term policy priorities should focus on "absorbing the shock" while maintaining macroeconomic stability. Monetary policy needs to remain flexible to address potential second-round inflation pressures. Fiscal policy should be more prudent, prioritizing targeted support for the most vulnerable groups while avoiding large-scale, indiscriminate subsidies and price interventions that could distort market signals.

The IMF report also noted that despite strong overall growth in Asia, youth unemployment remains high, reflecting a mismatch between skills and job demands. The IMF recommended that countries strengthen reforms in education systems and retraining mechanisms, enhance social safety nets, boost domestic demand, deepen regional cooperation, and promote energy transition and infrastructure investment to improve economic resilience.