South Asia to Be Fastest-Growing Region in 2023, Despite Challenges
SOUTH ASIA
India, which accounts for most of the regional economy, is set to remain robust with 6.3 percent growth in the 2023-24 fiscal year, while others like Maldives and Nepal are also expected to grow thanks to a rebound in tourism. But things are bleaker in other countries.
South Asia is expected to be the fastest-growing region in the world in 2023, with growth of 5.8 percent, according to the World Bank. However, the region's growth is not fast enough to meet its development goals, and that the growth is unevenly distributed.
India, which accounts for most of the regional economy, is set to remain robust with 6.3 percent growth in the 2023-24 fiscal year, while others like Maldives and Nepal are also expected to grow thanks to a rebound in tourism. But things are bleaker in other countries. Bangladesh's growth may slow to 5.6 percent, while projections for Pakistan's growth — only 1.7 percent — are below the rate of its population growth, the World Bank said. Sri Lanka, whose economy collapsed last year, is recovering slowly from a severe recession, but the IMF last week held off from releasing a second tranche of a funding package after concluding that the country had failed to make enough progress in economic reforms.
Another concern is the high level of government debt in South Asian countries. This could make it difficult for governments to respond to economic shocks or invest in public services. The region is also vulnerable to further shocks from natural disasters, which have become more frequent and intense due to climate change.
Despite the challenges, the World Bank report also identifies opportunities for growth in South Asia. The report recommends that governments in the region seize opportunities for energy transition. This could create jobs, reduce reliance on energy imports, and cut pollution levels.