South Asia Economic Forecast

South Asia Economic Outlook

South Asia’s GDP will grow less than the 10-year average of 5.6% in 2023. The main drags will be a tougher base effect and a weaker global economy. Growth should weaken the most in Pakistan due to the fallout from 2022’s floods, while Bangladesh and India will remain among Asia’s star performers. Social unrest and extreme weather pose risks.

South Asia Inflation

Regional inflation fell to 7.3% in April from 8.2% in March on slower price increases in Bangladesh, India and Sri Lanka. On average, inflation in South Asia should cool in 2023 on a tougher base effect but will remain above the 10-year average of 5.8% due to subsidy cuts and weak currencies. Key risks include extreme weather, currency runs and further subsidy cuts.

This chart displays Economic Growth (GDP, ann. var. %) for South Asia from 2010 to 2021.

2017 2018 2019 2020 2021
GDP per Capita (USD) 1,942 1,975 2,020 1,909 2,197
Economic Growth (GDP, ann. var. %) 6.5 6.4 4.0 -4.4 8.5
Private Consumption (ann. var. %) 6.1 7.2 5.1 -4.1 10.6
Fixed Investment (ann. var. %) 8.0 10.9 0.3 -6.1 13.0
Industrial Production (ann. var. %) 4.8 5.0 0.5 -6.9 11.0
Unemployment (% of active population, aop) 5.0 5.0 5.5 5.8 5.6
Fiscal Balance (% of GDP) -3.9 -3.8 -5.2 -8.9 -6.4
Public Debt (% of GDP) 65.4 66.4 71.3 82.1 79.1
Inflation (CPI, ann. var. %, aop) 4.0 3.9 5.3 6.4 5.9
Policy Rate (%, eop) 5.97 6.28 5.20 4.30 4.30
Current Account Balance (% of GDP) -2.1 -2.5 -1.2 0.5 -1.5

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