NEW DELHI
A new data warns that the growing conflict in the Middle East is casting a dark shadow over the economies of Bangladesh, Pakistan, and Sri Lanka.
According to S&P Global Ratings, these South Asian nations are at high risk because they rely heavily on imported fuel. If oil prices stay high or supplies are cut off, their hard-won economic recoveries could quickly fall apart.
Bangladesh appears particularly vulnerable. The country buys almost all its oil from abroad and only has enough stored to last about a month. If the war drags on, the government might have to strictly limit how much fuel people can use. Additionally, nearly half of the nation’s electricity comes from gas, much of which is also imported. This could lead to power shortages and keep prices for daily goods painfully high.
While Bangladesh’s foreign cash reserves have recently grown to $29.6$ billion, the war creates an “unwelcome headwind.” High fuel costs might stop inflation from falling, making life harder for families already struggling with rising costs. Pakistan and Sri Lanka face similar threats, as expensive energy can drain their limited savings and hurt trade.
In contrast, nations like Laos are safer because they use water power to generate electricity. For the rest, the window to protect their economies is narrowing. Experts suggest that these fragile nations must prepare for a long period of uncertainty. The focus now is on whether they can survive these global shocks without losing their financial stability.
