El Nino, AI to widen economic growth gap in developing Asia: ADB

The Asian Development Bank (ADB) projects that the economic growth gap among developing Asian economies will widen this year. This divergence is attributed to varying impacts of climate events and technological advancements. Countries such as the Philippines and Cambodia are facing significant challenges due to the ongoing energy crisis and the anticipated strong effects of El Nino, which could severely impact agricultural production across the region. Conversely, economies like India and Vietnam are experiencing a boost in their export sectors, driven by the advancements and adoption of artificial intelligence (AI).

The ADB's latest economic outlook, published on September 23, 2026, highlights that the Middle East conflict is expected to have a more substantial impact on developing Asia and the Pacific than previously forecast. Growth in the region is projected to moderate to 4.9% this year, a decrease from 5.5% in 2025. While economic activity remained robust in early 2026, supported by consumption and investment, higher energy costs, disruptions to supply chains, and tighter financial conditions are anticipated to slow growth in the upcoming months. Inflation is also expected to increase further as elevated energy prices translate into higher costs for food and other goods.