Oct 10 2024: The World Bank has increased its growth forecast for South Asia to 6.4% in 2024, up from a previous estimate of 6.0%, citing robust domestic demand in India and quicker economic recoveries in countries like Sri Lanka and Pakistan.
India’s economic growth for the fiscal year ending March 2025 has been revised upward to 7%, compared to April’s estimate of 6.6%. This improvement is driven by a rebound in agricultural output and stronger private consumption.
“You have an emerging consumer class in India driving the economy forward, along with recoveries in Sri Lanka and Pakistan, and a tourism-led revival in Nepal and Bhutan,” said Martin Raiser, World Bank Vice President for South Asia.
South Asia is confirmed as the fastest-growing region among emerging economies monitored by the World Bank, with projected growth of 6.2% annually over the next two years. Raiser emphasized the potential for further growth with greater regional integration and sustained economic reforms.
India’s central bank also maintained its GDP growth forecast at 7.2% for the fiscal year and shifted to a neutral policy stance.
Pakistan’s economy is expected to grow by 2.8% in the current fiscal year, benefiting from a recovery in manufacturing and relaxed monetary policy. Sri Lanka, recovering from a debt default and economic crisis, saw its forecast raised to 4.4% for this year and 3.5% for 2025.
Nepal’s growth forecast was revised up to 5.1%, and Bhutan’s to 7.2%. However, Bangladesh’s growth forecast was downgraded to 4.0% due to a slowdown in garment exports and recent social unrest.
The World Bank also recommended increasing women’s participation in the workforce, which could significantly boost the region’s long-term economic output. Currently, South Asia has the lowest female labor force participation globally, at just 32%. Raiser noted that aligning women’s employment rates with men’s could enhance production potential by up to 50%.