Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Asian Development Bank has announced a financial support package to help its developing member countries (DMCs) address the economic and financial impacts arising from the conflict in the Middle East.
ADB President Masato Kanda said the bank will provide rapid, flexible, and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience. This includes fast-disbursing budget support and trade and supply chain financing to ensure the continued import of essential goods, including oil. He noted that the initiative builds on ADB’s experience in supporting Asia and the Pacific during periods of global uncertainty.
The bank stated that it has sufficient resources to protect ongoing and planned operations while expanding emergency support based on the needs of member countries, including the use of its countercyclical lending buffer.
ADB is closely monitoring global market developments and their potential impact on economies across the region, particularly in terms of energy price volatility, inflation, and external balances.
According to the bank’s latest analysis, disruptions in shipping routes have already increased costs and delivery times. Supply risks are extending beyond energy to key industrial inputs such as petrochemicals and fertilizers, which could affect agriculture and food production. Economies dependent on tourism and remittances are also facing additional vulnerabilities. The conflict has further increased uncertainty and tightened financial conditions, putting pressure on currencies and capital flows.
In response, ADB is prepared to provide timely financial and technical support to help countries manage risks, maintain macroeconomic stability, and protect vulnerable populations. The support package has two main components. The first is fast-disbursing budget support, including the use of the Countercyclical Support Facility, to help governments deal with fiscal pressures and reduce the impact of economic shocks.
The second component is the Trade and Supply Chain Finance Program (TSCFP), which supports the private sector in maintaining the flow of critical imports such as energy and food. Under this program, ADB has decided to temporarily resume support for oil imports, recognizing the significant impact of rising oil prices and supply disruptions.
ADB has started discussions with the most affected member countries on possible immediate assistance and will continue working with governments, development partners, and the private sector to ensure coordinated and effective responses.
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