The fallout from the UK’s Brexit vote will hamper emerging Asian trade, with a number of analysts revising down their forecasts for the region.

While the UK accounts for just 2% of East and South Asia’s exports volume, the uncertainty caused by the decision to leave the EU will play on trade and investment, particularly given the lack of clarity around the UK’s ongoing relationship with the EU.

The Asian Development Bank (ADB) remains relatively bullish on emerging Asia’s trade economy, but admits that Brexit – along with the soft economic situation in the US – will have a negative impact on the region. It now forecasts growth of 5.6% for emerging Asia in 2016 – down by 0.1% on last year’s prediction.

However, the development bank has made clear its view that the strong fundamentals of developing Asian economies have helped offset the effect of the global political headwinds: the situation would be much worse had the region not been growing relatively strongly beforehand.

“Although the Brexit vote has affected developing Asia’s currency and stock markets, its impact on the real economy in the short term is expected to be small. However, in light of the tepid growth prospects in the major industrial economies, policymakers should remain vigilant and be prepared to respond to external shocks to ensure growth in the region remains robust,” says the ADB’s chief economist Shang-Jin Wei.

The ADB warns, however, that in Central Asia, the continued economic strife in Russia combined with low commodity prices will remain a drag, particularly on the resource rich economies of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan.

Less positive about the fallout of Brexit is a consensus poll of economists collated by Focus Economics. A report points out that exports to the wider EU account for 11% of Asian (excluding Japan) exports.

“Therefore, the expected slowdown in the euro area following the Brexit, particularly core counties such as Germany, will likely hurt East and South Asia’s already-battered external sector,” it reads.

Inbound investment will suffer as investors look for safe havens for their capital. This adds to an already bleak picture for some sectors. This year has seen a host of large projects go to the wall amid a lack of investor confidence, particularly in the natural resources sectors.

In April, GTR reported that amid sluggish commodity prices, many oil and gas executives were considering cancelling projects this year. In 2015, 68 major projects were cancelled globally, which would have brought 27 billion barrels of oil online. At an ADB summit in Fiji this week, director for the Pacific region Emma Veve warned that resource economies were dwarfing the rest of the Asia Pacific region.

Perhaps as a means of countering political risk and the lack of international investor appetite, governments in Asia have been exploring expansionary fiscal policies, a trend that may help boost growth.

China, Japan and South Korea are among the economies looking to embark on public spending programmes, leading Nikita Shah of Capital Economics to proclaim the end of the era of austerity.

“Austerity is all but over,” she writes, adding that the UK government’s decision to abandon former chancellor George Osborne’s deficit reduction programme, as well as an end to tightening in the eurozone and the US is being reflected further east.