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ASEAN-6 Growth Forecasts Cut as West Asia Conflict Fuels Energy Crisis

Economists have reduced growth forecasts for the ASEAN-6 nations for 2026 and 2027, primarily due to the economic fallout from the West Asia conflict. Maybank Investment Bank notes the downgrades are most significant for the Philippines, Vietnam, and Thailand, as surging energy prices hurt net importers. The conflict has disrupted oil and gas supplies, creating a shock compared to historic energy crises and short-circuiting monetary easing cycles. While most countries face weakened currencies and fiscal burdens, Malaysia is better positioned as a net energy exporter.

Key Points: ASEAN GDP Growth Trimmed on West Asia Conflict, Energy Shock

  • GDP forecasts cut for 2026 & 2027
  • Philippines, Vietnam, Thailand see largest downgrades
  • Inflation forecasts raised across ASEAN-6
  • Malaysia cushioned as net energy exporter
2 min read

Economists cut ASEAN-6 GDP growth amid West Asia conflict

Economists downgrade ASEAN-6 GDP forecasts for 2026-2027 due to Middle East conflict, citing surging energy prices and supply disruptions.

"Surging energy prices and disruptions to commodity supplies will be negative for most ASEAN countries - Maybank Investment Bank"

Kuala Lumpur, March 24

Economists have trimmed ASEAN-6 gross domestic product growth forecast to 4.5 per cent in 2026 from 4.8 per cent, and to 4.7 per cent in 2027 from 4.8 per cent, due to the fallout of the conflict in West Asia.

The ASEAN-6 nations refer to Indonesia, Singapore, Thailand, Vietnam, the Philippines, and Malaysia.

Maybank Investment Bank said in a recent note that the downgrades are larger for the Philippines (-0.4 percentage points), Vietnam (-0.4 percentage points) and Thailand (-0.3 percentage points).

"Surging energy prices and disruptions to commodity supplies will be negative for most ASEAN countries, which are net oil and gas importers," said the research house.

According to Maybank, Malaysia is the only country in the region that stands out as a net energy exporter, which will help cushion the impact of the Middle East shock.

It also said a steep rise in energy prices will worsen the current account balances and weaken the currencies of ASEAN's net energy importers, reports Xinhua news agency.

Maybank has also raised ASEAN-6 inflation forecast to 2.7 per cent in 2026 (from 2.2 per cent) and 2.7 per cent in 2027 (from 2.5 per cent), with higher adjustments for Thailand (+0.8 percentage points in 2026), the Philippines (+0.5 percentage points), and Indonesia (+0.5 percentage points).

"The energy price shock has short-circuited the monetary easing cycle... Higher energy prices and fuel subsidies will add to the fiscal burdens of Indonesia, Thailand and Malaysia. Indonesia's 3 per cent fiscal deficit ceiling may be tested if the oil shock is protracted," it added.

Countries worldwide are taking drastic measures to conserve fuel and ensure continued energy access for their people in the wake of the disruption in oil and gas supplies triggered by the escalation in the Middle East conflict.

The effect of the current disruptions in West Asia is equivalent to the two major oil crises in the 1970s and the 2022 natural gas crisis after Russia invaded Ukraine, all put together, according to a top official of the International Energy Agency (IEA).

Nations across Asia, Africa, and Europe have adopted a range of extraordinary steps, including additional public holidays, work-from-home mandates, fuel rationing, and industrial shutdowns to extend limited fuel reserves.

- IANS

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Reader Comments

S
Sarah B
Interesting to see Malaysia being the only net exporter cushioning the blow. Makes me wonder about the data for India's position in this. We import a massive amount of oil, so our current account and inflation must be under similar, if not greater, pressure. The RBI has a tough job ahead.
P
Priya S
The comparison to the 1970s oil crises is chilling. 😟 It feels like we're lurching from one global shock to another - pandemic, Ukraine war, now this. The common person in Thailand or the Philippines will feel this through higher prices for everything. Hope our government is preparing contingency plans.
R
Rohit P
While the economic analysis is sound, the article barely scratches the surface on the human cost of the conflict that's causing this. Our focus shouldn't just be on GDP percentages, but on the lives lost and displaced. The economic fallout is a symptom of a much larger tragedy.
V
Vikram M
"Fuel rationing, industrial shutdowns" - reading this is scary. This is not just an economist's report, it's a blueprint for potential hardship. ASEAN nations are major manufacturing hubs. If their industries slow, global supply chains get another hit, affecting jobs and prices worldwide, including here.
K
Karthik V
The silver lining, if any, is that such crises force innovation and efficiency. Maybe this will finally accelerate the shift to electric vehicles and solar power in Southeast Asia (and India) faster than any policy could. Necessity is the mother of invention, as they say.

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