How the Ongoing War in West Asia is Affecting Your Cost of Living

Original: From dosas to airfares: how the distant war is making your cost of living expensive

Mint•Apr 4, 20266 min

In a Nutshell

The ongoing conflict in West Asia is causing significant increases in everyday expenses, from food prices to travel costs. With aviation fuel prices surging and domestic airfares rising by about 15%, consumers are advised to reassess their budgets and prepare for ongoing volatility in living costs.

Key Points

01Food prices, particularly for items like dosas, have risen due to increased LPG costs.
02Airfare on domestic routes has increased by approximately 15%, while international travel costs have surged by nearly 30%.
03Consumers are encouraged to prepare for rising living costs by reassessing budgets and emergency funds.
04Innovative financial products like prepaid gift cards for mutual fund investments are being introduced.
05Healthcare and caregiving costs are critical factors that should be included in retirement planning.

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Full Summary

The conflict in West Asia, involving Iran, the US, and Israel, is having a ripple effect on global living costs. Food prices have surged, with filter coffee now costing ₹25, a 25% increase, primarily due to rising LPG prices. Travel expenses are also affected, with domestic airfares increasing by about 15% and international fares by nearly 30% as aviation fuel prices rise and air routes are rerouted. Consumers are advised to prepare for ongoing volatility by reassessing their budgets and emergency funds. In the investment sector, the Securities and Exchange Board of India (Sebi) has proposed introducing prepaid gift cards for mutual funds, aiming to simplify investment access. Additionally, the home loan industry is innovating with subvention schemes, which allow buyers to defer EMI payments, but come with risks of ballooning debt. Lastly, the rising costs of healthcare and caregiving must be factored into retirement planning, as many families are unprepared for these expenses. Chief economist Madan Sabhnavis from Bank of Baroda emphasizes that while recession is unlikely, households will face inflationary pressures.

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