Middle East Tensions Threaten Asian Economies; ADB Urges Exchange Rate Stability

• ADB Chief Economist Albert Park warns Middle East tensions could hit Asian economies hardest due to energy market disruptions.
• Policymakers should prioritize exchange-rate stability, liquidity support, and targeted fiscal measures over price controls or broad subsidies.
• Asia's vulnerability stems from being net energy importers, with many economies' net energy imports exceeding 2% of GDP.
• The Strait of Hormuz, a critical chokepoint, handles 20% of global seaborne oil and LNG, impacting major importers like Japan, South Korea, India, and China.
• Park emphasizes tracking shipping indicators and building strategic petroleum reserves for resilience against supply disruptions.