Masato Kanda, President of the Asian Development Bank, warned that inflation in the Asia-Pacific region may persist and even intensify amid global uncertainty. "The global economy is facing unprecedented uncertainty," he said in an interview. Kanda, a former Deputy Minister of Finance for International Affairs of Japan, is in Bangkok for the annual meetings of the IMF and World Bank in 2026.
According to him, inflation in the region may continue and even worsen. Among the risk factors, he cited the sharp rise in energy prices due to instability in the Middle East, the intensification of El Niño, and the increasing frequency of climate change-related natural disasters.
According to the ADB forecast, the growth of developing economies in the Asia-Pacific region will slow to 5.0% in 2026 from 5.5% in 2025. Given the strong dependence of Asian countries on oil and gas supplies from the Middle East, the ADB has allocated $5.6 billion in financial support.
The rise in long-term interest rates, primarily in developed economies, has increased the debt burden of developing countries with large dollar-denominated obligations. "Developing countries face heightened inflationary risks amid rising energy prices and transportation costs, as well as concerns about fiscal sustainability," Kanda added. According to him, as world leaders are well aware of the importance of energy security, there is an opportunity to promote reforms, including strengthening resilience through regional cooperation.
The next annual ADB meeting will be held in May next year in Nagoya. Kanda called it an important opportunity for international cooperation at a time when it faces challenges. He expressed hope that the meeting will encourage more Japanese companies to expand their business in Asia.
Regarding the Japanese economy, Kanda said that maintaining sound macroeconomic policy is extremely effective for any country and is the best weapon against speculators. Timely adjustment of interest rates would help protect the Japanese economy.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.