The conflict in the Middle East is having a multi-channel impact on regional economies, said George Luarsabishvili, Senior Economist for the Caucasus, Central and West Asia at the Asian Development Bank (ADB), during a briefing, APA-Economics reports.
He noted that in 2025, economic growth in developing Asia and the Pacific exceeded expectations. Growth was mainly driven by the strong performance of India’s economy, which partially offset the relative slowdown in China.
George Luarsabishvili stated that economic growth in the region accelerated in several countries, particularly due to increased oil production in Kazakhstan. In Türkiye, growth was driven not by credit, but by investments related to post-earthquake reconstruction.
According to the ADB official, despite certain challenges in the energy sector, Azerbaijan demonstrated positive economic growth, while in Georgia, economic dynamics were supported by the sustainability of external financial inflows.
He emphasized that inflation across the region has generally increased and remains particularly high in West Asia. Among the main reasons for this are global geopolitical tensions, especially the ongoing conflict in the Middle East.
The ADB representative noted that the conflict affects economies through several channels: disruptions in supply chains, rising import inflation, current account risks, and the deterioration of trade terms.
In addition, he stated that the tightening of global financial conditions also poses an additional risk. Thus, the suspension of interest rate cuts by the US Federal Reserve and the European Central Bank may limit borrowing opportunities for countries in the region.
According to George Luarsabishvili, these factors could negatively affect the pace of economic growth in the region by weakening both consumption and investment.
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