The World Bank revised its earlier projections for the same period by 1.2% and projected the Indian economy to grow at 7.5% in 2024. Overall, growth in South Asia is expected to be strong at 6.0% in 2024, driven mainly by robust growth in India and recoveries in Pakistan and Sri Lanka, the World Bank said in its latest South Asia Development Update on Tuesday.
According to the report, South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1% in 2025.
“In India, which accounts for the bulk of the region’s economy, output growth is expected to reach 7.5% in FY23/24 before returning to 6.6% over the medium term, with activity in services and industry expected to remain robust,” the bank said in its report, quouted by news agency PTI.
Also Read | World Bank projects Nepal's economic growth to be 3.3 per cent in 2024.
In Bangladesh, output is expected to rise by 5.7% in FY24/25, with high inflation and trade and foreign exchange restrictions constraining economic activity. Following the contraction in FY22/23, Pakistan’s economy is expected to grow by 2.3% in FY24/25 as business confidence improves. In Sri Lanka, output growth is expected to strengthen to 2.5% in 2025, with modest reserves, remittances, and tourism recoveries.
“South Asia’s growth prospects remain bright in the short run, but fragile fiscal positions and increasing climate shocks are dark clouds on the horizon,” said Martin Raiser, World Bank Vice President for South Asia. “To make growth more resilient, countries need to adopt policies to boost private investment and strengthen employment growth,” he said.