Conflict in Middle East Threatens Sri Lankan Food Security 📈

The Kiel Institute warns of severe economic fallout for South Asia if global conflicts escalate, particularly regarding the potential closure of the Strait of Hormuz. As a nation reliant on imported inputs, Sri Lanka faces significant risks to its recovery path. • Impact on Food & Cost of Living Food prices in Sri Lanka, India, and Pakistan are projected to rise by 10% to 15% under a short-run full closure scenario of the Strait. This follows recent domestic hikes in fuel and electricity, further straining household budgets. • Welfare and Economic Losses The report estimates welfare losses for Sri Lanka between -1.8% and -3.5%. These losses are projected to be 10 to 20 times larger than those in advanced economies, highlighting the vulnerability of the South Asian region to maritime trade disruptions. • Global Context & Advocacy The Dalai Lama and Pope Leo have issued urgent appeals for the cessation of violence in the Middle East and Russia-Ukraine. The reports emphasize that the ICT/BPM, apparel, and tea sectors—vital for Sri Lanka’s foreign exchange—remain sensitive to these geopolitical shocks and rising logistics costs. _Source: Kiel Institute / Provisional Economic Data (April 2026)_