South Asia Economic Outlook
Our panelists expect South Asia’s GDP growth in 2026 to again top that of other world regions, led by India. That said, other South Asian economies are set to expand less quickly due to relatively tight monetary policy, government austerity and political instability. The main downside risk is a collapse in India-U.S. trade talks.
South Asia Inflation
Average South Asian inflation rates continue to trend down in October, declining to 1.5% from 2.4% in the prior month as price pressures fell in Bangladesh and—at an especially sharp rate—India. Since 2022, South Asian inflation rates have eased notably, but are set to rebound in 2025 before stabilizing in 2026 due to a lower base effect and interest rates.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2010 to 2025.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Economic Growth (Real GDP, ann. var. %) | -4.3 | 8.9 | 7.2 | 7.9 | 6.0 |
| Policy Interest Rate (%, eop) | 4.35 | 4.59 | 7.27 | 7.81 | 7.14 |
| GDP per Capita (USD) | 1,899 | 2,203 | 2,309 | 2,414 | 2,570 |
| Merchandise Exports (USD bn) | 357 | 502 | 548 | 528 | 529 |
| Merchandise Trade Balance (USD bn) | -146 | -260 | -338 | -276 | -328 |
| Inflation (CPI, ann. var. %, aop) | 6.4 | 5.9 | 8.6 | 7.9 | 5.7 |
| International Reserves (USD bn) | 644 | 679 | 624 | 686 | 714 |
| Private Consumption (annual variation in %) | -4.2 | 10.9 | 7.3 | 4.8 | 6.9 |
| Merchandise Imports (USD bn) | 503 | 762 | 886 | 805 | 856 |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 5.9 | 6.3 |
| External Debt (% of GDP) | 23.8 | 22.2 | 21.4 | 21.3 | 21.3 |
| Industrial Production (ann. var. %) | -7.0 | 11.3 | 5.8 | 6.2 | 4.0 |
| Fiscal Balance (% of GDP) | -8.6 | -6.4 | -6.4 | -5.6 | -4.8 |
| Public Debt (% of GDP) | 82.1 | 78.1 | 77.5 | 77.0 | 77.3 |
| Current Account Balance (% of GDP) | 0.4 | -1.2 | -2.4 | -0.9 | -0.6 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | 5.3 | 6.1 | 6.1 |