South Asian economies bounce back but face fragile recovery
View(s):WASHINGTON – Prospects of an economic rebound in South Asia are firming up as growth is set to increase by 7.2 per cent in 2021 and 4.4 per cent in 2022, climbing from historic lows in 2020 and putting the region on a path to recovery.
But growth is uneven and economic activity well below pre-COVID-19 estimates, as many businesses need to make up for lost revenue and millions of workers, most of them in the informal sector, still reel from job losses, falling incomes, worsening inequalities, and human capital deficits, says the World Bank in its twice-a-year regional update.
Released this week, the latest “South Asia Economic Focus: South Asia Vaccinates” shows that the region is set to regain its historical growth rate by 2022. Electricity consumption and mobility data is a clear indication of recovering economic activity. India, which comprises the bulk of the region’s economy, is expected to grow more than 10 per cent in the fiscal year 2021-22—a substantial upward revision of 4.7 percentage points from January
2021 forecasts.
The outlook for Bangladesh, Nepal, and Pakistan has also been revised upward, supported by better than expected remittance inflows: Bangladesh’s gross domestic product (GDP) is expected to increase by 3.6 per cent in 2021; Nepal’s GDP is projected to grow by 2.7 per cent in the fiscal year 2021-22 and recover to 5.1 per cent by 2023; Pakistan’s growth is expected to reach 1.3 per
cent in 2021, slightly above previous projections.
The improved economic outlook reflects South Asian countries’ efforts to keep their COVID-19 caseload under control and swiftly roll out
vaccine campaigns.