At the end of 2025, growth had been stronger than expected. And this year had started well in the Asia-Pacific region with exports exceeding forecasts. But the IMF (International Monetary Fund) warns of the region’s vulnerability to the energy crisis linked to the conflict in the Middle East, particularly between the USA and Iran.
A region like Asia-Pacific, weakened by its dependence on oil and gas imports
The rising costs of oil and gas weigh on the GDP, the gross domestic product of the Asia-Pacific region, as highlighted by Krishna Srinivasan, director of the Asia-Pacific department of the fund:
“Oil and gas consumption represents about 4% of the region’s GDP, despite variations between countries. This percentage is almost double that of Europe. Additionally, there is a strong heterogeneity. For example, oil and gas consumption exceeds 10% in Malaysia and Thailand, but only 2% in Australia and New Zealand. Secondly, the low national production means that this high energy intensity results in a dependence on imports.”
Australia forced to seek regional solidarity after a fire at one of its refineries
Even though Australia seems to be in a better position than others, a fire at one of its refineries led it to urgently secure its supplies. 100 million liters of diesel will arrive from Brunei and South Korea. And the Malaysian national company Petronas, among others, will also be involved. This is what Anwar Ibrahim, the Malaysian Prime Minister, promised during a meeting with his Australian counterpart:
“As far as fuel is concerned, Petronas has assured us that once national needs are met, there will clearly be a surplus, and we are assured that priority will be given to Australia.”
Solidarity in both directions with Malaysia
A long-standing reciprocal solidarity in a win-win system, as recalled by Anthony Albanese, Australian Prime Minister:
“This conflict has caused unprecedented disruptions in global energy supply. To meet this challenge, Australia is working in collaboration with its close allies, including Malaysia. Australian resources contribute to the energy supply of our region, while our farmers contribute to feeding it. Almost 60% of Malaysia’s wheat and 75% of its lamb and beef come from Australia, and our neighbors know that providing fuel and fertilizers to Australia helps ensure the food supply of this region.”
Drop in growth and inflation on the horizon
The oil crisis will therefore boost regional cooperation. Nevertheless, the IMF believes that growth in the Asia-Pacific region will decrease; from 5% in 2025 it will drop to 4.6% this year and 4.2% in 2027. And inflation is expected to worsen…
(Review the report by Bruno SAT)
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