“ADB will deliver rapid, flexible, and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience,” ADB President Masato Kanda said in a statement.

The support will include fast-disbursing budget assistance and trade and supply-chain financing to secure imports of essential goods, including oil, he added.

The Manila-based lender said it has sufficient resources to safeguard existing and planned operations while expanding emergency support in line with DMC needs, including through its countercyclical lending buffer. The bank is closely monitoring global market developments, particularly energy price volatility, inflationary pressures, and external account risks across Asia and the Pacific.

ADB’s latest analysis shows that disruptions to key shipping routes have already raised transport costs and delivery times. Supply risks extend beyond energy to critical industrial inputs such as petrochemicals and fertilisers, posing potential challenges for agriculture and food production. Economies dependent on tourism and remittances are also facing heightened vulnerabilities, while tighter financial conditions are putting pressure on currencies and capital flows.

In response, ADB said it stands ready 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 for countries facing fiscal pressures, including the use of the bank’s Countercyclical Support Facility to help governments stabilise their economies and cushion the impact on livelihoods.

The second component is ADB’s Trade and Supply Chain Finance Program (TSCFP), which supports the private sector to ensure continued flow of critical imports, including energy and food. The bank has decided to reactivate support for oil imports under the programme on an exceptional and temporary basis, citing the sharp rise in oil prices and supply chain disruptions.

ADB said it has begun discussions with severely affected DMCs on possible immediate support and will continue working with governments, development partners and the private sector to ensure coordinated responses aimed at maintaining economic stability and protecting vulnerable groups.

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The anticipated drop in output reflects lower cotton prices, shifting planting intentions in major producing countries, and weaker demand — particularly from China. With production currently exceeding consumption in 2025/26, the projected decline next season is expected to bring global supply and demand closer to equilibrium.

China is set to retain its position as the world’s largest producer and consumer of cotton, although its usage is forecast to ease slightly as manmade fibres continue to gain market share.

India, Brazil and the United States will remain pivotal suppliers to the global market, while Bangladesh and Vietnam are expected to sustain strong import demand.

World cotton lint trade is forecast at 9.6 million tonnes in 2026/27. Brazil is projected to remain the leading exporter, followed by the United States.

Meanwhile, evolving trade policy developments — including new US tariff measures and updated trade agreements involving Bangladesh, India and the European Union — are adding fresh uncertainty to the global cotton outlook. The ultimate impact will depend on how these measures are implemented and how markets respond.

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Services trade is also expected to cool, with exports projected to rise 4.6% in 2025 and 4.4% in 2026, compared with 6.8% in 2024.

“Trade growth will likely slow in 2026 as the impact of the cooling global economy and new tariffs set in,” the WTO warned in its latest update of "Global Trade Outlook and Statistics".

Still, the trade body noted that AI-driven demand helped buoy global flows in 2025. Exports of semiconductors, servers, and telecommunications equipment surged 20% year-on-year in value terms in the first half of the year, accounting for nearly half of global merchandise trade expansion.

Overall, world merchandise trade volumes rose 4.9% year-on-year in the first half of 2025, while trade values in US dollar terms increased 6%, following a 2% rise in 2024.

The WTO projects global GDP growth at 2.7% in 2025 and 2.6% in 2026. While the 2025 outlook was revised upward from earlier estimates, the 2026 downgrade offsets much of the gain, with tariff impacts expected to weigh more heavily in the later year. An early inventory buildup of durable goods in 2025 is unlikely to be fully unwound in 2026, further dampening demand.

By region, Asia and Africa are expected to lead export growth in 2025, alongside modest gains in South and Central America, the Caribbean, and the Middle East. Europe will likely see slower growth, while North America and the Commonwealth of Independent States (CIS) are projected to post declining exports. Least-developed countries (LDCs) are forecast to record solid export gains but may face weakening momentum ahead.

On the import side, Africa and LDCs are set to register the fastest growth in 2025, while North America is expected to see a contraction. In 2026, only North America, Europe, and the CIS are forecast to improve their export performance, while imports are projected to weaken across all regions.

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Global stocks are expected to decline 3.8% to 15.37 million tonnes, led by a sharp drawdown in China, according to the International Cotton Advisory Committee (ICAC) latest report, released on Wednesday.

China’s 2024/25 ending stocks fell 9% to 7.89 million tonnes, a reduction that also drove a 65% plunge in imports to 1.1 million tonnes.

For 2025/26, China has maintained its quota policy, allowing 200,000 tonnes of sliding tariff rate cotton imports for textile enterprises.

Outside China, stocks increased by 2.0% in 2024/25, with the United States reporting the largest gain — ending the season with a 9.0% rise to 817,000 tonnes. Brazil and West Africa also posted higher stock levels during the same period.

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But what are government bonds? What determines how much investors will pay for them? And what can bond “yield curves” tell us about an economy?

Consider a government whose outlays exceed its revenues by $100. To finance the deficit, it can borrow from investors by issuing a bond. The bond is a promise by the government to pay back the $100 principal to investors at a future date, plus annual interest, called a coupon payment, to compensate investors for the opportunity cost of parking their funds in the bond rather than some other investment.

This opportunity cost has two components: an inflation component (to preserve the purchasing power of investors’ money) and a real, inflation-adjusted, component (the additional return, on top of inflation, investors might forgo on alternative investments). The higher the expected rate of inflation and returns on alternative investments, the higher the return the government must generally offer investors.

Suppose the government issues a one-year $100 bond, or bill, with a coupon rate of 5 percent. This is a commitment to pay back investors $105 after one year: $100 in principal, $5 in interest. If the coupon rate equals the investors’ opportunity cost, investors will be willing to buy the bond at its face value, or at par ($100, in this example).

But if investors’ opportunity cost exceeds the 5 percent coupon, they will buy the bond only at a price below par. Say they are willing to pay only $98. This would provide a higher return on their investment, specifically 7.1 percent [(105÷98)-1]. This total return, which by definition equals investors’ opportunity cost, represents the bond’s yield (or yield to maturity).

Primary and secondary markets

A direct bond sale by the government to investors is a primary market transaction. But bonds can also change hands between investors in the secondary market. This is because bonds are tradable securities, like stocks. The key implication is that the issuance yield on a bond can differ from the prevailing market yield.

For instance, let’s assume that a major commercial bank fails immediately after the government issues the $100 bond above. This fuels fears of a financial crisis and recession. As investors come to expect smaller returns and lower inflation because of the recession, the opportunity cost of funds falls sharply, from 7.1 percent to 3 percent. In this situation, the bond issued at $98 will now trade above par in the secondary market, at $101.95, to reflect the new market yield of 3 percent.

Governments can issue bonds of different maturities, typically ranging from 1 to 30 years. Each bond has its own coupon rate and associated yield to maturity. Longer-term bonds usually carry a higher yield. This is called term premium. It reflects the additional compensation investors demand for the uncertainty associated with future inflation and economic conditions, and for forgoing other investments for longer.

Chart 1 plots bonds’ maturities on the horizontal axis and their corresponding market yields at a given time on the vertical axis. These yield curves tell us many things—the most important is whether markets expect the economy to strengthen or weaken.

Let’s assume markets expect economic growth to accelerate. This means future inflation will likely be higher than present inflation: As the economy heats up, demand for goods and services will pick up and eventually feed into prices. The lure of alternative investments, such as commodities or property, will also rise as economic activity strengthens. Both these factors mean investors will demand a higher yield on a longer-term than on a shorter-term government bond. In other words, the yield curve will slope upward—as was the case for the US on December 16, 2024 (see red line).

Are yield curves always upward-sloping? No. When US inflation spiked following the COVID-19 pandemic, the Federal Reserve hiked interest rates. Because higher interest rates typically dampen household consumption and business investment, the hike fueled expectations of an economic slowdown, weaker inflation, and lower economic returns. Reflecting these market expectations, the government yield curve began to invert, or slope downward (see blue line). An inverted yield curve is often seen as a recession predictor, and, until recently, inversions preceded every US economic contraction for the past half century.

Country risk premium

Do yield curves of government bonds in emerging markets and low-income countries convey the same information as those of advanced economies? Yes, but with a greater focus on country risk premium. Major advanced economies are diversified, and their institutions are strong. Their sovereign bonds are generally considered safe because investors are almost certain the government will pay them back. The same cannot be said for all developing economies, which typically have weaker institutions and are more prone to shocks that can lead to large currency depreciations, rapid inflation, and loss of access to market funding.

Some developing economy governments—especially those with lots of foreign-currency debt—must sometimes restructure their debt (change their bonds’ repayment profile, yield, or both). This default risk, or country risk premium, means their bond yields are generally higher than those for advanced economies across all maturities. This difference in bond yields, or spread, is an important indicator of sovereign credit risk (see dark gray line).

When country risk reaches a point where markets see debt restructuring as imminent, the yield on bonds with short residual maturities typically spikes, producing a sharply inverted yield curve. In early 2014, for instance, nobody knew that Ukraine would restructure its sovereign bonds within a year. But the March 2014 inverted yield curve showed that investors were already pricing in a debt event. Because such operations involve a bigger extension of the residual maturity of bonds falling due sooner (in 2015, say) than those due later (2018), investors demanded a higher yield on the former than the latter (see yellow line).

Developing bond markets

Many developing economies are working to develop the market for local-currency government bonds to reduce reliance on foreign-currency borrowing, which carries exchange rate risk. Putting in place the requirements for such a market—sound debt management, robust laws, regulations and market infrastructure, and a diversified domestic investor base—can take time, but the rewards are substantial.

The IMF, together with the World Bank, provides active guidance to governments in this area. It’s encouraging that many developing economies, notably in Asia and Latin America, have made progress on this front in recent decades.

A yield curve in a well-functioning government bond market not only tells us something about the economy’s outlook, but is also a benchmark for pricing other financial assets, such as long-term bank loans, corporate bonds, and mortgages. It facilitates more efficient allocation of resources and thus supports long-term economic growth.

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Employment and production typically move from agriculture to manufacturing to services, as part of natural progression that comes with rising income, according to an IMF new blog.     

Today, many Asian countries—including China, Indonesia, Korea, and Thailand—are highly industrialized. If history is a guide, industry’s share of production will shrink as more activity passes to services.

Indeed, the growth of services has already drawn about half of the region’s workers into that sector, up from just 22 percent in 1990, as hundreds of millions moved from farms and factories. This shift is likely to accelerate with further expansion of international trade in modern services such as finance, information, and communication technology, as well as business outsourcing (for example, as already done in India and the Philippines).

By contrast, traditional services—for example, tourism or distribution services—have lower productivity and contribute less to economic growth.

Policymakers should embrace this shift to modern services because they have higher productivity, as we show in an analytical note accompanying our October 2024 Asia-Pacific Regional Economic Outlook. Transitioning to a more services-led economy comes with greater economic growth opportunities, provided the right policies are in place.

Productivity is an important variable when considering which sectors can best deliver growth in coming years. Manufacturing productivity in Asia is already close to the level of global leaders, so further improvement offers only limited scope to boost productivity and growth.

By contrast, services in Asia don’t enjoy the same efficiency advantage, so the region’s economies have more to gain by catching up with countries that have the most efficient services sectors.

In addition, in several services sectors like finance and business services, productivity is higher than in manufacturing, which means greater contributions to growth.

For example, Asia’s labor productivity in financial services is four times higher than in manufacturing, and it’s twice as high in business services, our new analysis shows.

Even so, countries need to have the right conditions in place to benefit from services. Manufacturing benefited from low trade costs and greater global integration, but services sectors are relatively protected in Asia, which can hamper progress.

Just like Asia’s higher tariffs on agriculture, which average 12 percent versus 7.5 percent globally, foreign companies that hope to enter the services sector face various restrictions. These include outright bans, approval requirements, local presence, and higher tax rates.

Policymakers should also recognize that workers leaving agriculture and manufacturing need the skills to find good jobs in services.

With waves of new digital technologies replacing some jobs like clerical support, policies should ensure widespread internet and technology access, and introduce education and training to develop a digitally skilled workforce capable of leveraging artificial intelligence.

With growth projected to slow in many Asian countries due to rapid aging, boosting productivity by nurturing productive services is a key to Asia’s future success.

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The infected person is a 66-year-old European man who worked in an African country with an ongoing outbreak. Officials did not specify which country. The man, who has a home in Thailand, was not reported to have severe symptoms, according to the New York Times report.

It’s the second time that the new and deadlier version of the virus has been found outside Africa. Coupled with the earlier case, discovered in Sweden last week, the announcement in Thailand is likely to stir concerns that the virus is spreading more widely. The outbreak previously had been concentrated in the Democratic Republic of Congo.

The new version of the virus has a death rate of 3 percent, much higher than the 0.2 percent death rate observed in a 2022 outbreak, the global newspaper added.

On the other hand, Bangladesh has already implemented precautionary measures to prevent the entry of Mpox, an infectious disease primarily affecting the Democratic Republic of Congo and neighboring countries.

The Ministry of Health has already issued a high alert for Mpox, previously known as monkeypox, following reports of the virus in various countries.

The alert came just a day after Pakistan’s health ministry identified its first case of Mpox.

Daud Adnan, the Deputy Director of the Department of Hospitals and Clinics at the Directorate General of Health Services (DGHS), reassured the public that no cases have been detected in Bangladesh.

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The Indian PM congratulated the Bangladesh interim government chief in a post on social media platform X, formerly twitter, minutes after the later took oath at a ceremony at Bangabhaban in Dhaka.

“My best wishes to Professor Muhammad Yunus on the assumption of his new responsibilities. We hope for an early return to normalcy, ensuring the safety and protection of Hindus and all other minority communities. India remains committed to working with Bangladesh to fulfill the shared aspirations of both our peoples for peace, security and development,” reads the post on X.

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Dhaka, Bangladesh (BBN)

Under this Framework, the RBI, the central bank of India, would enter into bilateral swap agreements with SAARC central banks, who want to avail of the swap facility.

Actually, this framework enables bilateral currency swap agreements between the RBI and SAARC central banks to address short-term foreign exchange liquidity needs or balance of payments crises.

“Under the Framework for 2024-27, a separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee. The total corpus of the Rupee support is ₹250 billion,” the RBI said in a notification on Thursday.

Besides, a US Dollar/Euro Swap Window with a corpus of US$2.0 billion will continue, according to the notification,

All SAARC member countries can access the facility, provided they sign the bilateral agreements.

SAARC consists of eight member states: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The SAARC Currency Swap Facility came into operation on November 15, 2012 with an objective to provide a backstop line of funding for short term foreign exchange liquidity requirements or balance of payment crises of the SAARC countries till longer term arrangements are made.

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Dhaka, Bangladesh (BBN)

The April 2020 version of the World Economic Outlook (WEO), released on early Wednesday in Washington, DC, unveiled the projection.

The IMF also projected that the Gross Domestic Product (GDP) of Bangladesh would jump at 9.5 per cent in 2021 from 2.0 per cent of this calendar year.

It added that the average inflation rate would be 5.50 per cent in 2020. And it is expected to reach at 5.6 per cent in 2021.

However, the IMF projected 7.4 per cent of growth for Bangladesh for the current year report published in October 2019.

The World Bank a few days ago projected that the economic growth of Bangladesh might turn out to be only 2-3 per cent this fiscal year due to the outbreak of coronavirus.

Bangladesh achieved 8.15 per cent economic growth in last fiscal year and the budgetary projection of current fiscal year (FY), 3019-20 is 8.2 per cent.

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