Asia will remain main driver of global growth: IMF

Asia will remain the main driver of global growth with India and China contributing 70 per cent of the regional expansion, the International Monetary Fund (IMF) said Thursday, adding that the energy shock due to the Gulf crisis will negatively impact the region.

However, the five per cent regional growth witnessed in 2025, despite the impact of US tariffs and trade uncertainty, is projected to moderate to 4.4 per cent in 2026 and 4.2 per cent in 2027, the International Monetary Fund (IMF) said in its report on the Asia-Pacific segment.

“Asia entered 2026 on a solid footing with growth remaining resilient despite the region bearing the brunt of US tariffs and heightened uncertainty,” Krishna Srinivasan, Director for the IMF Asia Pacific Department, told reporters here.

However, he said, given the region’s high fossil fuel intensity and reliance on conflict areas for key commodities, the new energy shock will negatively impact the region.

“The shock is raising inflation, weakening external balances, tightening financial conditions, and narrowing policy space,” he said.

According to the IMF, Asia consumes about 38 per cent of the world’s oil and 24 per cent of its natural gas.

It’s also one of the largest crude refiners, accounting for about 35 per cent of global refining capacity, which is heavily concentrated in China, India, Korea, and Singapore.

Srinivasan said growth across most Asian economies turned out stronger than expected in late 2025.

This is thanks to exports and consumption, which held up better than anticipated, supported by accommodative policies and financial conditions.

“Asia’s exports to the US declined but that to the rest of the world increased,” he said.