Risks to South Asia’s growth may rise if inflation persists amid sustained price pressures in the region, according to Reserve Bank of India Governor Shaktikanta Das.
(Bloomberg) — Risks to South Asia’s growth may rise if inflation persists amid sustained price pressures in the region, according to Reserve Bank of India Governor Shaktikanta Das.
At the same time, the region also has to worry about rising debt in the past few years that’s undermining macroeconomic stability, Das said in New Delhi on Friday at an International Monetary Fund event where he underscored the importance of multilteral agencies.
The role of agencies, particularly the IMF and the World Bank, “becomes crucial in making debt treatment efforts more effective,” Das said.
The governor’s comments came as neighboring Sri Lanka and Pakistan are grappling with a funding crunch that’s seen their foreign currency reserves deteriorate amid runaway inflation. Sri Lanka’s stockpile is below $2 billion while Pakistan’s was below $6 billion.
South Asia must also strengthen energy cooperation to boost resilience against external shocks and must prioritize shifting to a green economy as the region is among the most vulnerable to climate change, the RBI governor said.
Rupee settlement of cross border trade and CBDC can also be areas of greater cooperation in the future, Das said.
–With assistance from Devidutta Tripathy.
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