South Asia in June 2026: the most important developments in economy
Across South Asia and Southeast Asia in June 2026, the most closely watched economic story was Indonesia's currency and market strain. Investors sold Indonesian assets on June 5 as an oil shock pushed up inflation across the region, and the rupiah hit a record low. Bank Indonesia raised interest rates in a surprise move on June 9 and again to 5.75 percent by June 18, its third increase in a month, while the five-year bond yield reached its highest since 2020. The government raised the price of a widely used fuel by 32 percent on June 12 and announced support packages worth about $1.5 billion, including rice aid. The index provider MSCI raised transparency concerns and, on June 24, postponed its review of Indonesia's market status until November; earlier, a negative verdict had been feared to risk $13 billion in outflows. In Sri Lanka, 31 canals were renovated for flood control and irrigation, with the project due to finish by October.
Energy prices shaped the wider region. The Middle East conflict pushed global growth to its lowest rate since the pandemic, according to a report on June 11. Singapore secured gas supplies to replace Qatari deliveries through 2026, Malaysia said it had kept supplies stable through 100 days of the energy crisis, and Malaysia Airlines raised fares by 20 to 30 percent. The Philippines led in solar adoption as power prices rose. Peace deal optimism lifted the Colombo Stock Exchange on June 18.
Trade news was mixed. The United States proposed forced-labour tariffs covering Sri Lanka and 59 other economies and imposed a 10 percent tariff on Indonesia. Singapore's May exports rose 38.4 percent from a year earlier on AI demand, China-ASEAN trade grew 20.6 percent in the first five months, and Vietnam recorded its largest trade deficit on record. Malaysia and Thailand moved closer to resolving a seafood dispute.
In South Asia, the World Bank approved $1.1 billion in emergency funding for Bangladesh on June 28, and an IMF team was due to review Sri Lanka's reform programme.
by WorldBrief & Maksim Micheliov | AI-generated summary
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