Images: Getty Images (Ishara S. Kodikara; Money Sharma; Sajjad Hussain; Arun Sankar; Tobias Schwarz)
STRATEGIC OUTLOOK 2023
South Asia | Top five risk drivers
Several governments in the region are highly likely to struggle to meet mounting international debt obligations in 2023, feeding into regime instability and civil unrest risks. These trends largely stem from high commodity prices and insufficient foreign exchange reserves for several nations in the region. We anticipate that Bhutan, Nepal, Pakistan, Sri Lanka and the Maldives will struggle to adequately service their loans and require debt restructuring. Governments are likely to face unpopular conditionality arrangements and cut public spending.