Asia Roundup
How the War in Iran Could Impact Global Economy
The global economy that has weathered a year of trade tariffs and other shocks now faces a new test: an escalating US-Israel conflict with Iran that threatens to disrupt global oil and natural gas supplies and unleash potentially far-reaching implications for the world, Coface chief APAC economist Bernard Aw wrote for CNA.
Around 80% of the crude oil passing through the Strait of Hormuz is destined for Asian buyers, including China, India, Japan and South Korea. Even temporary uncertainty can prompt these economies to adjust stockpiles, revise energy purchasing strategies and prepare for higher import costs.
China Says 82% of Local Financing Vehicles Phased Out in Debt Cleanup
China has made significant progress in containing local government debt risks, with more than 82% of local government financing vehicles (LGFVs) phased out and their outstanding operational financial debt reduced by more than 74%, Caixin reported, citing a government report.
The update on a nationwide debt-resolution campaign launched in 2024 was included in a report on the national economic and social development plan delivered for review at the fourth session of the 14th National People’s Congress.
ADB to Provide Tajikistan with $1.1 Billion of Funding in 2026-2030
The Asian Development Bank’s (ADB) strategy for Tajikistan involves providing $1.1 billion of funding in 2026-2030, Interfax reported, citing ADB President Masato Kanda.
He said that the priorities include the development of sustainable and efficient infrastructure, such as in the energy sector.
Indonesia Roundup
Indonesia’s Ramadan Holiday Bookings Slump
Transport bookings for Indonesia’s upcoming end-of-Ramadan holiday are significantly down on last year, which analysts say highlights the fragile state of Southeast Asia’s largest economy as President Prabowo Subianto pursues controversial policies, Nikkei reported.
Train and bus operators told Nikkei that unlike in previous years, millions of tickets are still available for Eid al-Fitr, the celebration at the end of the Muslim fasting month when tens of millions of Indonesians usually return to their home villages to spend time with their families.
Fitch Cut Won’t Stop Indonesia’s $19.8 Billion Free Meal Program, Minister Says
Indonesia does not plan on stopping its multibillion-dollar free meal rollout despite Fitch’s concern that it can strain fiscal health, Jakarta Globe reported, citing Coordinating Minister for Economic Affairs Airlangga Hartarto.
Indonesia had just started the program, with the first trays of meals only making their way to students in January 2025, the minister told reporters.
“And so, we shall continue its rollout,” he said. “We can’t get rid of our long-term [goals] just for something short-term.”
Acrostics Asia wrote on 6 February 2026:
📒 Quick Take: Indonesia’s Fight Against the Tide
Indonesia risks losing its hard-won credibility in the international markets if policymakers don’t change course soon…Rolling back the free school lunch program could have eased Indonesia’s fiscal burden, but the president has shown a pattern of not being able to tolerate perceived weakness.
Fitch Cuts Indonesia’s Debt Outlook, Minister Says Danantara is a New Agency
Indonesia’s sovereign wealth fund Danantara still needs time to prove itself, Coordinating Minister for Economic Affairs Airlangga Hartarto said, after Fitch cut the country’s outlook to negative. The rating agency highlighted Danantara in its consideration.
“Danantara is a new sovereign wealth fund. Not everyone is familiar with it and it needs a track record,” the minister said. “The assessment from Fitch is noted.”