India faces manageable but escalating exposure to the West Asia conflict, according to economist Swaminathan Aiyar, who argues the country can absorb near-term shocks if the conflict resolves quickly. Aiyar cites US political pressure as the primary mechanism likely to force an early resolution, providing India a window of relative insulation from direct energy market disruption. However, he cautions that second-order effects are already baked in regardless of timeline. Rising inflation and higher fertilizer costs, both linked to energy price transmission, are identified as unavoidable consequences even under an optimistic resolution scenario. Fertilizer costs matter acutely for India given their direct pass-through to agricultural input prices and rural household budgets. The key risk variable is conflict duration: a prolonged engagement would compound these pressures beyond what India's current economic buffers can comfortably offset. Investors and policymakers should watch crude price trajectories, fertilizer import costs, and the Reserve Bank of India's inflation management posture as leading indicators of escalating stress.
Pakistan's economy grew 3.7 percent in FY2026, its fastest rate in four years, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb. Growth beat last year's 3.18 percent but missed the 4.2 percent target, with floods, regional conflict, and weaker food exports cited as key drags.
The Union government released an additional Rs 1,09,019 crore in tax devolution to states on August 1, 2026, separate from the regular monthly transfer. The lump-sum release aims to accelerate state capital spending in the July-September quarter, with Uttar Pradesh, Bihar, and Madhya Pradesh among the top recipients.
US mortgage rates have risen to a one-year high as markets weigh Federal Reserve rate uncertainty and Middle East conflict-driven inflation fears. Higher rates increase monthly payments for new buyers and are likely to further suppress housing market activity and refinancing.
Pakistan's Sensitive Price Index rose 13.52 percent year on year for the week ending July 2, 2026, marking 45 consecutive weeks of annual gains. Electricity up 49 percent, wheat flour up 68 percent, and LPG up 44 percent year on year are the main drivers.
