This report examines the productivity implications of the 2026 energy crisis for developing Asia, with particular attention to the informal sector of the economy that employs the majority of workers, accounts for the majority of enterprises, and is least equipped to absorb energy price shocks. The central argument is that energy price shocks affect informal-sector productivity through transmission channels that are distinct from and more severe than the channels through which they affect formal enterprises: informal enterprises cannot hedge energy costs, cannot pass through price increases to customers in competitive local markets, cannot substitute between energy sources, and have no access to the government subsidies and tax relief that partially insulate formal enterprises. The result is a disproportionate productivity shock to the sector that can least afford it — with implications for poverty, inequality, and inclusive development that extend well beyond the duration of the crisis itself.

Table of Contents:

Executive Summary
Chapter 1: Introduction — The 2026 Energy Crisis and Developing Asia
Chapter 2: Energy Price Shocks and Productivity — The Analytical Framework
Chapter 3: Macroeconomic Transmission — How the Crisis Reaches Developing Asia
Chapter 4: Sectoral Productivity Effects
Chapter 5: The Informal Sector — Why Energy Shocks Hit Hardest
Chapter 6: Differential Vulnerability — Why Some Economies Are More Resilient
Chapter 7: Policy Responses — Protecting Productivity During the Crisis
Chapter 8: Conclusions
References