South Asian countries have come out of the pandemic with eroded fiscal space and record public debt.  Global financial tightening is putting additional pressure on government budgets. At the same time, the region’s vulnerability to climate risks—with more than 800 million people currently living in communities that are projected to become climate hotspots—demands substantial resources to prepare for future disasters and build climate resilience. These considerations will have strong implications for fiscal management across South Asian countries. First, policymakers must determine how to reduce deficits to rebuild much-needed buffers and regain fiscal space. Second, insurance mechanisms must be put in place to strengthen fiscal capacity. And third, both public and private capital, along with support from the international community, will be necessary for investments in building resilient infrastructure. […]