South Asia in May 2026: the most important developments in economy
South Asia's economic news in May 2026 was dominated by Sri Lanka's response to the energy shock from the Iran war. On 16 May the government imposed a 50% customs duty surcharge on vehicle imports. On 9 May it raised electricity prices by 18%, citing rising fuel costs. On 26 May the central bank raised its key interest rate by 100 basis points to 8.75%, citing inflation and currency pressure. On 30 May the energy minister announced power cuts to maintain grid stability. An audit report said Rs. 2.8 billion had been spent on elephant fences while human-elephant conflict continues to rise. A tanker carrying 100,000 tons of crude oil was reported en route to Bangladesh.
Across Southeast Asia, fuel costs and disrupted shipping through Hormuz weighed on economies. Thailand scrapped a 25-year-old energy exploration agreement with Cambodia, and its Chamber of Commerce backed a 400 billion baht emergency loan. Airlines cut 2 million seats amid a jet fuel crisis, and Thailand recorded a record trade deficit of $10 billion. Malaysia considered reducing its RON95 fuel subsidy cap to 150 liters per month. On 29 May the Philippines received its first Iranian crude cargo since the Hormuz blockade, and on 30 May oil prices fell sharply on hopes for a US-Iran ceasefire agreement.
Indonesia's rupiah hit a record low despite central bank intervention. President Prabowo announced plans to centralize commodity exports through a state body, which unsettled buyers and palm oil stocks, and the central bank raised interest rates. MSCI said it would remove some of Indonesia's largest companies from its global indices, and analysts questioned the country's strong GDP growth figures.
Singapore's economy grew faster than expected in the first quarter, and its April key exports posted their highest growth rate since 2012, with AI-related demand cited. Singapore stocks reclaimed a record high. Vietnam faced a US trade investigation into intellectual property, with a US tariff deadline approaching.
by WorldBrief & Maksim Micheliov | AI-generated summary
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