Socio-political issues will dominate polls

The slowing economy in South Asia has emerged as a major challenge for the region's incumbent governments, some of whom will face elections in the next year or two.

- SMRUTI S PATTANAIK

The Covid-hit economy that was on the way to recovery received another wallop from the Russia-Ukraine war. Added to this is the depreciation of local currencies against the United States dollar. The rise in oil prices has a direct impact on food prices, but the region's opposition political parties have failed to implicate the ruling regime for the economic misery.

In India, the second fastest growing economy among the G20 countries, the performance of the manufacturing and service sectors has improved, but the last three-month average shows it has slowed down. In terms of the gross domestic product (GDP) growth rate, India is the third in the region with a 7 per cent growth in 2022, behind the Maldives (8.2 per cent) and Bangladesh (7.2 per cent). Sri Lanka is at the bottom with minus 8.8 per cent growth. A rise in commodity prices, slowdown in global demand and inflation will pull down growth.

Like other countries in the region, India has also announced that it will cut down on non-essential imports. The government’s decision to cushion the impact of rising oil prices by not increasing the price of petrol domestically has to some extent ameliorated economic hardship. In India, the dollar is at a 20-year high, putting pressure on imports. According to the Reserve Bank of India's September 2022 Monetary Policy Report, inflation remains at unacceptably high levels.