South Asia Economic Outlook
Risks to the outlook are tilted to the downside due to the threat of U.S. “reciprocal” tariffs from 9 July, with all four countries in negotiations to avoid higher levies. Regardless, the region’s economic growth is likely to slow this year, as U.S. levies are unlikely to fall below their pre-Trump levels, hurting external demand.
South Asia Inflation
Regional inflation was stable at April’s 3.4% in May, remaining far below the peak of 10.0% reached in Q3 2022. This year, oil and food prices are likely to be lower than in 2024, pushing inflation below its past-decade average of 5.7%. Still, upside risks persist: Poor weather could slash crop yields, and rising protectionism may disrupt global supply chains.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2010 to 2024.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Current Account Balance (% of GDP) | 0.4 | -1.2 | -2.4 | -0.9 | -0.6 |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 5.9 | 6.3 |
| Private Consumption (annual variation in %) | -4.2 | 10.9 | 7.3 | 4.8 | 6.9 |
| Industrial Production (ann. var. %) | -7.0 | 11.3 | 5.8 | 6.2 | 4.0 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | - | - | - |
| 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 | - |
| Policy Interest Rate (%, eop) | 4.35 | 4.59 | 7.27 | 7.81 | 7.14 |
| International Reserves (USD bn) | 644 | 679 | 624 | 686 | 714 |
| External Debt (% of GDP) | 23.8 | 22.2 | 21.4 | 21.3 | - |
| 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 |