When you consider that nearly 25 percent of our GDP is under direct threat from sectoral disruptions, the scale of the crisis becomes clear. As the fires of conflict in the Middle East continue to rage, the tremors are being felt far beyond the immediate geography of the Levant and the Persian Gulf. For Nepal, a nation inextricably tied to the global energy market and dependent on the labour corridors of the West Asian region, the economic stakes have seldom been higher. The Post ’s Biken K Dawadi sat down with former Executive Director of the Nepal Rastra Bank, economist Gunakar Bhatta , to explore the effects of the conflict on the national economy, dissect the intricate web of fuel volatility, inflationary pressures, and the structural shifts required to safeguard the Nepali economy. Ex
When you consider that nearly 25 percent of our GDP is under direct threat from sectoral disruptions, the scale of the crisis becomes clear. As the fires of conflict in the Middle East continue to rage, the tremors are being felt far beyond the immediate geography of the Levant and the Persian Gulf. For Nepal, a nation inextricably tied to the global energy market and dependent on the labour corridors of the West Asian region, the economic stakes have seldom been higher. The Post ’s Biken K Dawadi sat down with former Executive Director of the Nepal Rastra Bank, economist Gunakar Bhatta , to explore the effects of the conflict on the national economy, dissect the intricate web of fuel volatility, inflationary pressures, and the structural shifts required to safeguard the Nepali economy. Excerpts. How does this specific regional turbulence mechanistically drive the surge in global fuel prices, and in what ways is the Nepali state beginning to manifest these external shocks domestically? The relationship between fuel prices and the broader economy is characterised by a complex array of indicators that are both directly and indirectly interconnected. When we observe a spike in fuel prices, the most immediate and visceral impact is witnessed in inflation. This singular rise in the cost of a commodity has a cascading effect.