Goldman Sachs has significantly downgraded its monetary policy outlook for Indonesia this year while increasing its projections for interest-rate increases in India and the Philippines. The U.S.-Israeli conflict with Iran is driving up energy prices across Asia, fueling inflation that forces central banks to tighten policy. Goldman Sachs now expects no rate cuts in Indonesia through 2024, a stark reversal from its previous forecast. India faces three rate hikes in 2024, up from two previously, while the Philippines sees two hikes instead of one. This shift reflects Goldman's assessment that elevated energy costs will keep inflation stubbornly high in these economies.

The changes signal Goldman Sachs is prioritizing inflation control over growth support in Southeast Asia.