- The World Bank has updated its estimates, putting the Indian economy at 7.5% growth in 2024.
- India’s strong economic growth and the recovery in Pakistan and Sri Lanka are the primary drivers of this increase.
- Pakistan’s GDP is predicted to expand by 2.3% in FY24/25 as business confidence increases.
The World Bank has updated its estimates, putting the Indian economy at 7.5% growth in 2024and South Asia‘s growth at 6.0%. India’s strong economic growth and the recovery in Pakistan and Sri Lanka are the primary drivers of this increase.
With growth predicted to reach 6.1% in 2025, South Asia is predicted to continue being the world’s fastest-growing area for the following two years.
GDP Growth
With strong growth predicted for both industry and services, India’s output growth is predicted to hit 7.5% in FY23/24 and then drop to 6.6% in the medium run. Pakistan‘s GDP is predicted to expand by 2.3% in FY24/25 as business confidence increases, while Bangladesh’s output is predicted to increase by 5.7%.
In 2025, it is anticipated that Sri Lanka’s output growth will pick up to 2.5 percent, helped by moderate recoveries in reserves, remittances, and tourism.
In the medium term, South Asia’s economic prospects are still promising, but there are some concerning signs of impending climate shocks and precarious fiscal conditions. Countries must implement policies to increase private investment and support employment development if they want to make growth more resilient.
The chief economist for South Asia at the World Bank, Franziska Ohnsorge, feels that the region is not making the most of its demographic dividend. The region’s output could increase by 16% if it utilized the same proportion of the working-age population as other rising markets and developing economies.
India’s economy was surprised to the positive in the fourth quarter of 2023, growing 8.4% over the previous year. After a peak in mid-2023, inflation has been within the Reserve Bank of India’s target range of 2-6%, and the policy rate has not moved since February 2023.
In December 2023, domestic loan issuance to the business sector increased by 14% (year over year) in India, as financial conditions have remained favorable.
