World Bank Upgrades Growth Forecast For Fastest-Expanding Region

The World Bank raised its economic growth forecast for South Asia for this year, citing stronger domestic demand in India and faster recoveries elsewhere in the region.

South Asia’s economy will expand 6.4% in 2024, keeping it on track to be the world’s fastest-growing region, the World Bank said in a report Thursday. That’s up from 6% forecast in April. Growth is expected to reach 6.2% in each of the coming two years, according to the report.

“The widespread upgrades reflect robust growth in private consumption in India, and stronger tourism or hydro power exports in Bhutan, Nepal, and Sri Lanka than previously projected,’ the lender said in its South Asia Development Update.

“The region’s growth is vulnerable to shocks in fiscal and external sectors, and to climate shocks that particularly threaten the poor,” it said.

Growth forecasts for five South Asian countries — Sri Lanka, Bhutan, India, Nepal and Pakistan — were upgraded for this year and the next. Estimates for Bangladesh and Maldives were lowered because of policy uncertainties and debt concerns.

Inflation in South Asia is expected to moderate further as impacts of currency depreciation and supply constraints fade, according to the report.