South Asia Economic Outlook
Though paused until early July, the surprisingly large U.S. reciprocal tariffs led our panelists to cut their projection for South Asian GDP growth over the past month. A 10% U.S. levy remains in place on the region’s exports, and associated uncertainty will throttle investment. That said, GDP growth is still seen remaining above the 10-year average of 5.7%.
South Asia Inflation
Regional inflation fell to 3.6% in March (February: 3.8%), continuing to trend down from a peak of 10.0% reached in Q3 2022. In 2025, oil and food prices should fall, shoving inflation down below its past-decade average of 5.7%. That said, upside risks include bad weather knocking crop yields plus twisted global supply chains as a result of rising protectionism.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2011 to 2020.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Industrial Production (ann. var. %) | -7.0 | 11.3 | 5.8 | 6.2 | 3.9 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | - | - | - |
| Fiscal Balance (% of GDP) | -8.6 | -6.4 | -6.4 | -5.6 | - |
| 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 | - |
| Current Account Balance (% of GDP) | 0.4 | -1.2 | -2.4 | -0.9 | - |
| 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 | - |
| Economic Growth (Real GDP, ann. var. %) | -4.3 | 8.9 | 7.2 | 7.9 | - |
| Private Consumption (annual variation in %) | -4.2 | 10.9 | 7.3 | 4.9 | - |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 6.0 | - |