Why in news?
The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) released its Economic and Social Survey 2026. The report warns that inflation in developing Asia‑Pacific economies may rise to 4.6 per cent in 2026, up from 3.5 per cent in 2025, largely because of higher energy and food costs linked to the conflict in West Asia.
About UNESCAP
- Origins and mandate: UNESCAP was established in 1947 and is one of the United Nations’ five regional commissions. It is the most inclusive intergovernmental platform in the Asia–Pacific region.
- Membership: The commission promotes cooperation among 53 member states and nine associate members to address sustainable development challenges.
- Functions: UNESCAP works on macroeconomic policy, poverty reduction, trade and investment, transport, environment and sustainable development, information and communications technology, disaster risk reduction and social development. Its headquarters are in Bangkok, Thailand.
Highlights of the 2026 survey
- Rising inflation: The survey projects inflation in developing Asia‑Pacific economies will climb to 4.6 per cent in 2026. Higher energy, gas and fertiliser prices – driven by a West Asia conflict that escalated in February 2026 – are feeding into consumer prices. Brent crude briefly touched US $120 per barrel, and gas prices have risen about 55 per cent; urea prices are up roughly 35 per cent.
- Slowing growth: Economic growth across the region is expected to slow to around 4 per cent in 2026 from 4.6 per cent in 2025. For India, the report forecasts gross domestic product growth of about 6.4 per cent in 2026 (down from 7.4 per cent in 2025) with inflation around 4.4 per cent.
- Impact on households: Low‑income households and informal workers are likely to bear the brunt of rising prices because they spend a larger share of their income on food and energy and have limited social protection. Currency depreciation and higher freight rates add to the pressures.
- Policy challenges: ESCAP warns that prolonged geopolitical tensions could lead to higher commodity prices, interest rates and debt burdens. Policymakers face the dual task of managing inflation and fostering inclusive growth while transitioning to cleaner energy. The report stresses the need for regional cooperation, stronger domestic demand and carefully designed energy‑transition policies to avoid creating additional inflation.
Significance
UNESCAP’s survey highlights how global conflicts can reverberate through energy and food markets, affecting millions of people across Asia and the Pacific. Understanding these trends helps governments anticipate risks and craft policies that protect vulnerable populations while supporting growth and the shift to clean energy.
Source: Down To Earth
