Global growth under strain
Global growth looks resilient but recent energy shocks and the West Asia conflict injected fresh volatility into markets this week — oil prices and capital flows swung sharply, forcing investors to rethink risk and allocation. Emerging markets are most exposed: India’s finance ministry warned the outlook is “more uncertain” and Nepal’s new government is pushing ambitious institutional reforms to shore up growth amid the disruption. ( )
S&P’s March update raised near‑term inflation forecasts and now expects Dated Brent crude to average about $90 per barrel in March before easing toward roughly $60/b by year‑end in its baseline scenario. (spglobal.com) The International Energy Agency and other analysts say the West Asia conflict has produced a major supply shock, with damage to energy infrastructure and effective closures of chokepoints that handle roughly 20% of global oil and a similar share of LNG seaborne trade. (iea.org) Bloomberg data show foreign investors have pulled about $52 billion from Asian emerging‑market equities since the war began, and global funds sold a net $11 billion of developing‑Asia shares in a single week in March, including roughly $7.9 billion out of Taiwan, $1.6 billion from South Korea and $1.3 billion from India. (bloomberg.com) India’s Monthly Economic Review, published by the Department of Economic Affairs, states the country’s outlook has become “more uncertain” because West Asia disruptions have tightened supply conditions and raised inflation risks. (dea.gov.in) The finance ministry’s review and contemporaneous coverage flag worsening external‑sector pressures — surging import demand, a widening trade deficit and stress on capital flows and reserves — as immediate channels through which the energy shock could dent growth momentum. (economictimes.indiatimes.com) Nepal’s incoming administration under Prime Minister Balendra Shah and Finance Minister Swarnim Wagle has approved a 100‑point governance reform agenda and set manifesto targets — including an average 7% annual growth goal and raising per‑capita income above $3,000 — as a policy response to re‑anchor investor confidence. (kathmandupost.com) The OECD’s March outlook cut baseline growth, projecting global expansion of 2.9% in 2026 and 3.0% in 2027, explicitly attributing the downgrade to the energy shock and the escalation of geopolitical risks stemming from the Middle East conflict. (oecd.org)
