The ASEAN+3 region is projected to grow 4.0% in both 2026 and 2027, even as the ongoing Middle East conflict and disruptions to global energy supply have materially increased downside risks to the outlook, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
In its ASEAN+3 Regional Economic Outlook (AREO) 2026 released on Monday, AMRO said the region entered 2026 from a position of strength, supported by stronger-than-expected growth, low inflation and improved external buffers.
“The ASEAN+3 region entered 2026 from a position of strength, but the Middle East conflict has shifted the balance of risks to the downside,” said AMRO Chief Economist Dong He.
The region expanded by 4.3% in 2025, above the 3.8% projected after the April 2025 tariff shock. AMRO said economic activity was supported by firm domestic demand, robust exports boosted by AI-driven semiconductor demand, sustained investment and stronger intraregional economic linkages.
Headline inflation is forecast to rise from 0.9% in 2025 to 1.4% in 2026 and 1.5% in 2027 amid higher global energy prices.
AMRO said the impact of the Middle East conflict will depend on how long it lasts. If prolonged, the shock could spread beyond energy markets and affect industrial inputs, logistics, food prices, tourism and remittances.
It added that ASEAN+3 has become more regionally anchored over the past two decades, with more interconnected production networks and a greater shift towards intraregional demand. The region now accounts for 28% of global final demand.
