The World Bank on Tuesday slightly revised down its 2023 economic growth projection for South Asia to 5.6%, down 0.5 percentage points
WASHINGTON (Pakistan Point News / Sputnik - 04th April, 2023) The World Bank on Tuesday slightly revised down its 2023 economic growth projection for South Asia to 5.6%, down 0.5 percentage points.
"Released today, the latest South Asia Economic Focus, Expanding Opportunities: Toward Inclusive Growth, projects regional growth to average 5.6 percent in 2023, a slight downward revision from the October 2022 forecast. Growth is expected to remain moderate at 5.9 percent in 2024, following an initial post-pandemic recovery of 8.2 percent in 2021," the World Bank said in a statement.
Regional outlook has weakened due to tightening financial conditions, with large downside risks in most countries given limited fiscal space and depleting reserves, the World Bank stated.
The report also highlighted the need to roll back market distortions introduced during the pandemic and address debilitating socioeconomic divides that constrain South Asia's potential.
The bank noted that all countries in the region except Bhutan have downgraded their forecasts.
"Growth in Pakistan�which is still reeling from the impacts of last year's catastrophic floods and facing supply chain disruptions, deteriorating investor confidence, and higher borrowing and input costs�is projected to drop to 0.4 percent this year, assuming agreement on an IMF program is reached," the report said.
In India, the largest economy in the region, economic growth will also slow to 6.3% in FY2023/24 due to high borrowing costs and slower income growth, the bank said.
