Scenario analysis suggests regional growth could fall by 0.3 percentage points, while inflation could rise by 0.8 percentage points, relative to the baseline.”This would be the worst-case scenario, which AMRO chief economist Dr. Dong He was quick to assure, “We are not predicting a stagflation scenario. The region would still be able to grow and inflation is not, sort of out-of-control scenario. So we don’t see that worst outcome as part of the scenario analysis yet.”However, according to the AREO 2026 report, “A prolonged conflict would trigger cascading and non-linear effects. But the region confronting them today is structurally different from the one that faced earlier energy shocks,” the AREO report said. Named in the 1960s, stagflation shattered long-held economic theories when it emerged during the 1970s oil crisis.

Source: Philippine Star April 07, 2026 16:35 UTC