South Asia Economic Outlook
This year, our panel projects South Asia’s aggregate GDP growth to remain the world’s quickest, led by India. However, smaller South Asian economies are forecast to expand at slower speeds due to relatively tight monetary policy, government austerity and political instability. The Iran war poses a significant downside risk.
South Asia Inflation
In February, average South Asian inflation rates increased again from the prior month as price pressures rose in all four countries. After easing to the lowest level in years in 2025 due to lower oil and food costs, inflation should rise this year on past interest rate reductions. Still, inflation will stay below trend as commodity prices stay contained.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Unemployment (% of active population, aop) | 5.7 | 5.3 | 6.1 | 6.1 | 5.6 |
| GDP per Capita (USD) | 2,203 | 2,309 | 2,341 | 2,570 | 2,681 |
| Private Consumption (ann. var. %) | 10.9 | 7.3 | 4.9 | 6.9 | 6.5 |
| Merchandise Trade Balance (USD bn) | -260 | -338 | -276 | -328 | -379 |
| Economic Growth (Real GDP, ann. var. %) | 8.9 | 7.2 | 7.9 | 6.0 | 6.4 |
| Policy Interest Rate (%, eop) | 4.59 | 7.27 | 7.81 | 7.14 | 6.12 |
| Merchandise Exports (USD bn) | 502 | 548 | 528 | 529 | 535 |
| Inflation (CPI, ann. var. %, aop) | 5.9 | 8.6 | 7.9 | 5.7 | 3.1 |
| International Reserves (USD bn) | 679 | 624 | 686 | 714 | 764 |
| Merchandise Imports (USD bn) | 762 | 886 | 805 | 856 | 914 |
| Fixed Investment (ann. var. %) | 15.1 | 7.9 | 5.9 | 6.3 | 7.0 |
| External Debt (% of GDP) | 22.2 | 21.4 | 21.3 | 21.3 | 21.0 |
| Industrial Production (ann. var. %) | 11.3 | 5.8 | 6.2 | 4.0 | 4.1 |
| Fiscal Balance (% of GDP) | -6.4 | -6.4 | -5.6 | -4.8 | -4.6 |
| Public Debt (% of GDP) | 78.1 | 77.5 | 77.0 | 77.3 | 77.8 |
| Current Account Balance (% of GDP) | -1.2 | -2.4 | -0.9 | -0.6 | -0.8 |