Current:Home > NewsSouth Asia is expected to grow by nearly 6% this year, making it the world’s fastest-growing region-InfoLens
South Asia is expected to grow by nearly 6% this year, making it the world’s fastest-growing region
View Date:2024-12-23 19:54:56
NEW DELHI (AP) — South Asia is expected to grow by 5.8% this year, making it the fastest-growing region in the world even as the pace remains below pre-pandemic levels, the World Bank said on Tuesday.
The latest South Asia Development Update from the World Bank projected growth in the region to slow slightly to 5.6% in 2024 and 2025, as post-pandemic rebounds fade and reduced global demand weighs on economic activity.
At almost 6% this year, the region is growing faster than all other emerging markets, said Franziska Ohnsorge, the organization’s chief economist for South Asia.
“While high inflation and interest rates have bogged down many emerging markets, South Asia seems to be forging ahead,” the World Bank noted in its report.
Still, “for all of the countries here this represents a slowdown from pre-pandemic levels,” Ohnsorge said, adding that the growth wasn’t fast enough to meet various development goals set by countries in the region.
Despite the progress, the region still has a long way to go, the report said. Per capita incomes in South Asia are around $2,000 — one-fifth of the level in East Asia and the Pacific region. The current growth rates, while high, are not sufficient for South Asian nations to achieve high-income status within a generation, it said. Additionally, the growth is not necessarily equal.
India, which accounts for most of the regional economy, is set to remain robust with 6.3% 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%, while projections for Pakistan’s growth —only 1.7% — 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.
The World Bank said another concern was that government debt in South Asian countries averaged 86% of GDP in 2022, which is higher than other emerging markets. It added the high debt could increase the risk of defaults and raise borrowing costs.
The region’s economic outlook could also be affected by the slowdown in China’s economy and is vulnerable to further shocks from natural disasters, which have become more frequent and intense due to climate change, the report said.
Ohnsorge said that governments in South Asia could improve fiscal conditions by seizing on opportunities for energy transition, which could create jobs, reduce reliance on energy imports and cut pollution levels.
“Almost one-tenth of the region’s workers are employed in pollution-intensive jobs,” many of which are concentrated among informal and lower-skilled workers who are more vulnerable to changes in the labor market, the World Bank said. The region currently lags behind others in adopting energy-efficient technologies and creating more green jobs, Ohnsorge added.
The World Bank on Tuesday also released its latest India Development Update, which found that despite a challenging global economic environment, India was one of the fastest-growing major economies in the previous fiscal year at 7.2%. This put it as the second highest among the Group of 20 countries and was almost twice the average for emerging market economies, it said.
With global challenges expected to continue on the back of high interest rates, geopolitical tensions and sluggish global demand, overall economic growth is likely to slow in the medium-term. The World Bank forecasts India’s GDP growth for the current fiscal year to be 6.3%, attributing it mainly to external factors and waning pent-up demand after the COVID-19 pandemic.
veryGood! (347)
Related
- Elon Musk responds after Chloe Fineman alleges he made her 'burst into tears' on 'SNL'
- Report: NFL investigating why Joe Burrow was not listed on Bengals injury report
- Atlanta train derailment causes fire and diesel fuel spill after 2 trains collide
- High-ranking Mormon church leader Russell Ballard remembered as examplar of the faith
- Texas man accused of supporting ISIS charged in federal court
- Advertiser exodus grows as Elon Musk's X struggles to calm concerns over antisemitism
- Analysis: No Joe Burrow means no chance for the Cincinnati Bengals
- Judge rules Michigan lawmakers violated open meetings law during debate on gun control legislation
- 1 million migrants in the US rely on temporary protections that Trump could target
- Chinese court to consider compensation for people on missing Malaysia Airlines flight, relative says
Ranking
- Ranked voting will decide a pivotal congressional race. How does that work?
- At Formula One’s inaugural Las Vegas Grand Prix, music takes a front seat
- F1's Carlos Sainz crashes into Las Vegas drain cover in blow to his Ferrari and Formula 1's return to the city
- COSRX Snail Mucin: Everything You Want to Know About the Viral Beauty Product but Were Afraid to Ask
- Missing Ole Miss student declared legally dead as trial for man accused in his death looms
- Sean 'Diddy' Combs and singer Cassie settle lawsuit alleging abuse
- Man convicted in death of woman whose body was found in duffel bag along rural road
- 'I got you!' Former inmate pulls wounded Houston officer to safety after shootout
Recommendation
-
What is best start in NBA history? Five teams ahead of Cavaliers' 13-0 record
-
Fox Sports' Charissa Thompson Reacts to Backlash Over Her Comments About Fabricating Sideline Reports
-
Biden meets with Mexican president and closes out APEC summit in San Francisco
-
Snoop Dogg says he’s giving up ‘smoke.’ It caught some of his fans off guard
-
Justice Department says jail conditions in Georgia’s Fulton County violate detainee rights
-
French commission wants to remove statute of limitations for sexual violence against children
-
The story behind Omaha's rainbow house could make you watch what you say to your neighbors
-
6 Colorado officers charged with failing to intervene during fatal standoff