(SeaPRwire) –   SINGAPORE, April 6, 2026 — The ASEAN+3 Macroeconomic Research Office (AMRO) launched its primary annual publication today, the ASEAN+3 Regional Economic Outlook (AREO) 2026, which forecasts a 4.0 percent economic expansion for the region across both 2026 and 2027. Although the area has benefited from robust growth, contained inflation, and strengthened external buffers, the ongoing Middle East crisis and subsequent global energy supply disruptions have significantly heightened downside risks.

“The ASEAN+3 region began 2026 from a strong footing, yet the conflict in the Middle East has tilted the risk outlook toward the downside,” noted AMRO Chief Economist Dong He. “Nevertheless, the region is better prepared than in previous instances to manage an energy shock; its economies are more energy-efficient, less reliant on oil, entered this phase with low inflation, and most maintain sufficient policy flexibility to react.”

The region saw a 4.3 percent expansion in 2025, exceeding the 3.8 percent forecast made following the tariff shocks of April 2025. Economic performance was bolstered by solid domestic demand, strong exports—driven by AI-related semiconductor needs—consistent investment, and deepening economic ties within the region. In light of rising global energy costs, AREO 2026 projects headline inflation to climb from 0.9 percent in 2025 to 1.4 percent in 2026 and 1.5 percent in 2027.

The severity of the Middle East conflict’s impact on the region will depend on how long it lasts. A prolonged crisis could broaden the shock, affecting not just energy markets but also industrial supply chains, logistics, food costs, tourism, and remittances. The consequences will likely differ among member nations based on their reliance on energy and commodity imports, existing economic buffers, and available domestic policy tools.

He added: “As the global economy faces a series of shocks, maintaining policy flexibility is vital to avoid negative outcomes like stagflation. Central banks should ensure market stability and financial health, intervening decisively if supply-side pressures lead to persistent inflation. Regarding fiscal policy, governments ought to focus support on vulnerable populations while avoiding broad measures that might exacerbate inflation or threaten fiscal stability.”

The report also underscores a major structural shift that supports the region’s resilience. Over the last two decades, ASEAN+3 has become more self-contained, characterized by tighter production networks and a clear pivot toward intraregional demand. The proportion of the region’s value-added exports destined for the U.S. has dropped from roughly one-third to 20 percent, while the share consumed within the region has climbed to nearly 30 percent.

ASEAN+3 now represents the world’s largest market, making up 28 percent of global final demand. “The traditional perception of the region as merely the ‘world’s factory’—producing primarily for external markets—is increasingly outdated,” He stated. “Strengthening regional cooperation, accelerating the transition to green energy, and keeping trade and investment channels open will be crucial to maintaining this structural evolution and enhancing resilience.”

The complete AREO 2026 report is accessible via the AMRO website.

Read the statement from AMRO Director/CEO Yasuto Watanabe here.

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About AMRO

AMRO is an international body dedicated to fostering macroeconomic resilience and financial stability within the ASEAN+3 region, which includes the ASEAN nations, China, Hong Kong, Japan, and Korea. AMRO’s mission involves conducting macroeconomic surveillance, supporting regional financial initiatives, and offering technical assistance to its members. Additionally, AMRO acts as a regional knowledge center and supports financial cooperation across ASEAN+3.

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SOURCE ASEAN+3 Macroeconomic Research Office (AMRO)