South Asia Economic Outlook
This year, South Asia’s GDP growth is seen as higher than any other world region. India’s economy will drive momentum. That said, Bangladesh, Pakistan and Sri Lanka will expand much more weakly, owing to a combination of relatively high interest rates, political instability and fiscal consolidation. A collapse of India-U.S. trade talks is the key downside risk.
South Asia Inflation
So far in 2025, South Asia’s inflation has roughly halved to below the world average. Price pressures have cooled in all countries, especially in Bangladesh, Pakistan and Sri Lanka, which in recent years have suffered from double-digit inflation. Looking forward, lower commodity prices and stabilizing currencies will keep a lid on regional price pressures.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2011 to 2020.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| External Debt (% of GDP) | 22.5 | 20.9 | 20.1 | 20.0 | 20.5 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | 5.3 | 5.6 | 5.6 |
| 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 | 77.4 | 76.9 |
| Inflation (CPI, ann. var. %, aop) | 6.4 | 5.9 | 8.6 | 7.9 | 5.7 |
| Policy Interest Rate (%, eop) | 4.35 | 4.59 | 7.27 | 7.81 | 7.14 |
| International Reserves (USD bn) | 644 | 679 | 624 | 686 | 714 |
| Current Account Balance (% of GDP) | 0.4 | -1.2 | -2.4 | -0.9 | -0.6 |
| Merchandise Exports (USD bn) | 357 | 502 | 548 | 528 | 528 |
| Merchandise Imports (USD bn) | 503 | 762 | 886 | 809 | 856 |
| GDP per Capita (USD) | 1,906 | 2,211 | 2,320 | 2,427 | 2,582 |
| Economic Growth (Real GDP, ann. var. %) | -4.3 | 8.9 | 7.2 | 7.9 | 5.9 |
| Private Consumption (annual variation in %) | -4.2 | 10.9 | 7.3 | 4.8 | 6.9 |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 5.9 | 6.3 |