ASEAN+3 Economic Growth May Slow to 4% in 2026

The ASEAN+3 Macroeconomic Research Office, an international organization analyzing the economies of Japan, China, South Korea, and ASEAN, released its economic forecast on April 6th, predicting that the ASEAN+3 region’s economic growth rate will be 4% in 2026. This growth will be slower than in 2025 due to the impact of the attacks on Iran and US tariff policies.

The ASEAN+3 region’s economic growth rate in 2025 was 4.3%. High oil prices have already significantly impacted economic activity in emerging Asian markets. The forecast indicates that if the impact of the Middle East situation continues to escalate, the growth rate will fall to 3.7%, the lowest since 2022. A slowdown in the Asian economy could drag down the overall global economic performance.

The report predicts that in 2026, the ASEAN+3 region’s economy will be affected by US tariff policies, resulting in weak export performance, while demand related to artificial intelligence (AI) will stabilize compared to the previous year. Driven by rising crude oil prices, the inflation rate is expected to rise by 0.5 percentage points to 1.4%.

The ASEAN Plus Three Macroeconomic Research Office (ASEAN Plus Three) has proposed three scenarios regarding the Middle East situation. In the “base case” scenario, with conflict lasting for several months, the Asian economic growth rate is 4.0%. In the “de-escalation scenario,” with tensions easing within eight weeks, the growth rate is 4.1%. The “expansion scenario” projects a growth rate of 3.7%, potentially the lowest level since 2022 during the post-COVID-19 recovery.

Currently, Brent crude oil futures are around $100 per barrel, a significant increase from the beginning of the year when they were around $60. The office predicts that in the expansion scenario, crude oil prices will exceed $100 from March to December, with the inflation rate reaching 2.2%.

Dong He, the office’s chief economist, stated that the release of oil reserves by Japan and South Korea cannot fully offset the long-term impact of rising oil prices. He also pointed out that government subsidies and other fiscal support measures should have time limits and should focus on vulnerable groups and key industries.

He believes that the impact of rising oil prices varies across ASEAN countries, with net energy importers such as Thailand, the Philippines, and Singapore being the most directly affected.