Highlights
- After the Strait of Hormuz crisis, ASEAN inflation is expected to reach 3.1% in 2026, while regional growth slows compared to 2025. This increases the need for coordinated monetary and fiscal actions.
- ASEAN faces challenges in designing coordinated monetary and investment policies to control inflation while keeping interest rates attractive for investment.
- Higher interest rates and currency depreciation are raising the cost of capital, including for clean energy projects. This risks further widening of the region’s energy transition investment gap, which is estimated at around USD 68–170 billion through 2030.
- ASEAN Member States (AMS) could explore the utilisation of the Multilateral Development Banks (MDBs)' de-risking instruments, scaling blended finance, better coordinated regional foreign exchange rate stabilisation, and accelerating the power grid interconnection.