The blockade of the Strait of Hormuz, combined with the lingering effects of sanctions on Russia, has unleashed what analysts in Milan describe as the worst energy crisis of all time. Each day, an estimated 11 million barrels of crude and 5 million barrels of petroleum products are missing from world markets, alongside an annual shortfall of 220 billion cubic metres of gas. The World Bank now projects global growth will decelerate to 2.5 per cent in 2026, the slowest pace since the Covid-19 pandemic, with two-thirds of economies downgraded. Viewed from Washington, the shock is structural: fertiliser costs have jumped 40 per cent in parts of West Africa, and the bank’s chief economist warns of rising hunger as food supply chains buckle.

In Dhaka, the government’s response has been a budget for the 2026-27 fiscal year that slashes taxes on 60 essential goods—rice, lentils, cooking oil, and spices—while removing regulatory duties on imported spices entirely. The finance minister also announced a 43,335-crore-taka allocation for agriculture, a 500-crore-taka startup fund for young entrepreneurs, and duty exemptions for pharmaceutical ingredients and electronics manufacturing. The Dhaka Stock Exchange welcomed the stability message, but opposition parties dismissed the package, and the prime minister accused them of opposing even a tax-cutting budget. Analysts in the Bangladeshi capital detect a tension between the realism of a constrained revenue base and the optimism of ambitious spending pledges; the apex trade body cautioned that implementation would require extraordinary foresight and transparency.

Indonesia faces a parallel squeeze. The World Bank forecasts the fiscal deficit will remain at 2.8 per cent of GDP through 2027, anchored by heavy energy subsidies and large strategic projects. A record first-quarter deficit of 0.93 per cent of GDP drew public scrutiny, but officials in Jakarta insist the front-loading of expenditure is a deliberate shift to accelerate delivery. President Prabowo has made food self-sufficiency the centrepiece of his agenda, dispatching the agriculture minister to rally mass organisations behind the drive and launching a food development project in Papua. The national food agency has assured markets that rice stocks are ample, and the World Bank revised up Indonesia’s 2026 growth forecast to 5.0 per cent, citing robust early-year activity.

India offers a contrasting picture of resilience. The economy expanded 7.8 per cent year-on-year in the first quarter, beating expectations, helped by a landmark trade deal with the European Union and successive cuts in US tariffs. Yet even here, the Middle East conflict is a gathering headwind. Across the developing world, the crisis is forcing a reckoning between short-term relief and long-term structural reform. The path ahead hinges on whether the Hormuz chokepoint can be reopened and whether governments can sustain fiscal discipline while shielding their most vulnerable populations from the inflationary aftershocks.