West Asia Crisis May Keep Global Oil Market Tight for Long Time: ADB Economist

Park said it would also significantly increase inflation in the current fiscal year. In April, the ADB had estimated that India's GDP growth rate would remain strong at 6.9% in the current fiscal year due to strong domestic demand.

It would increase to 7.3% in the next fiscal year. Regarding inflation, the ADB had projected it to remain at 4.5% in the current fiscal year. For India, Park said, "We expect growth to decline by 0.6% in 2026-27. This is based on our ideal scenario. However, this will not adversely impact growth next year." India will bounce back next year.”

Park said inflation will rise 2.4% this year to 6.9%. He said, “So this is slightly higher than the inflation impact on this region (Asia-Pacific), because India is more dependent on imported oil and gas. If you exclude China, this negative 0.6% impact on growth this year is fairly consistent across the region.”

ADB, in its special update report on April 29, lowered its growth forecast for Asia-Pacific for 2026 from 5.1% to 4.7%. Asked about the impact of El Niño on food production, Park said, “Of course, it's very uncertain. Obviously, whenever India has a crop failure, we have a problem with higher prices. India accounts for a large share of the global rice trade. Therefore, whatever happens in India often has a significant impact on other countries as well.”

Park further stated that this, in addition to rising fertilizer prices, is also a cause for concern. He said that rising fertilizer prices will lead farmers to use less fertilizer, leading to lower yields and reduced availability later in the year. He added that this will certainly impact food prices, but the extent of this impact can only be gauged based on the gas crisis.