Page 14 - Policy & Economic Report - July 2025

POLICY AND ECONOMIC
ROEILPO&RGTAS MARKET

and import costs into domestic prices. Similarly, the ADB projects inflation in Developing Asia and the
Pacific at 4.3 per cent in 2026, before moderating to 3.4 per cent in 2027 as energy markets gradually
stabilise and supply-chain disruptions ease.
Figure 4: Inflationary Pressures Across Emerging Markets by Major CPI Components

Source: S&P Global Ratings
Global Trade and Supply Chains
Global trade continued to expand during mid-2026 but remained constrained by heightened geopolitical
tensions, rising trade policy uncertainty and persistent disruptions to global supply chains. While resilient
domestic demand and continued investment in technology-intensive industries supported merchandise
trade, escalating tensions in the Middle East, higher transportation costs and evolving trade policies
increased uncertainty for businesses and investors. According to the International Monetary Fund (IMF),
global trade is expected to recover gradually; however, the pace of expansion remains vulnerable to
geopolitical developments, energy market volatility and increasing trade fragmentation. The Asian
Development Bank (ADB) similarly notes that higher oil prices, increased freight charges and supply-chain
bottlenecks have raised trade costs across Asia, particularly for energy-importing economies.

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