Daniel Moss

In the hours after US and Israeli missiles slammed into Tehran, Anna Breman sprang into action. The governor of the Reserve Bank of New Zealand called colleagues, ran some numbers, and drafted lines to respond to the inevitable questions about how the conflict would upend the central bank’s sanguine outlook.

The sweeping imposition of US tariffs a year ago didn't wreck the global economy. Nor did it knock the dollar from its pedestal. The legions of greenback antagonists who foresee its demise every decade have been given pause. Yet they may be on to something.

Thailand’s economy, one of Asia’s brightest stars over a generation ago, has congestion issues. Problems are piling up with very poor timing, made worse by the strains on global business from the Iran war. Decision-makers, already beset by disappointing growth, enormous demographic challenges and a tourism industry that’s come down to earth, need to rise to the occasion.

Traders are going to need to hold onto their devices going forward, as these kinds of interventions are becoming the new normal.

Tourism arrivals in Thailand have been dropping, with 2026 projected to have fewer arrivals compared to last year. (Photo: CNA/Jarupat Karunyaprasit)

A much bigger inflation shock than imagined is coming for Southeast Asia — if a country that had shown promise is anything to go by. The Philippines, more often the focus of maritime rivalry between the US and China than developing economic trends, is in the grip of a sudden and brutal price surge brought on by the Iran war.

Indonesia is patting itself on the back for a respectable economic start to the year. But President Prabowo Subianto’s team would be wise not to overdo it. Markets aren’t expressing anywhere near the same comfort with the country’s trajectory.

For all China’s pointed criticism of the Iran war, it hasn’t been without advantage for the world’s second-largest economy. President Xi Jinping has been wrestling for years with a pernicious foe: deflation. The conflict has given prices at home a much-needed lift, one that Beijing must wish isn’t transitory. It’s a welcome development in an otherwise dour outlook.

Central banks in Southeast Asia are done talking and are starting to bow to the inevitable after hedging for months about riding out the market tumult from the Iran war. The jumbo interest-rate hike in Indonesia won't be the last hard step to prop up sagging regional currencies.

FOR all China's pointed criticism of the Iran war, it hasn't been without advantage for the world's second-largest economy.