South Asia Economic Outlook
South Asia’s 2025 GDP growth is projected to top all other world regions, with India driving momentum. Bangladesh, Pakistan and Sri Lanka are set to expand much more weakly than India as a result 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
In August, average South Asian inflation rose for the first time in 10 months to 2.7% (July: 2.4%) on an uptick in India driven by a low statistical base effect. In recent months, inflation has trended down in all south Asian countries, especially in Bangladesh and Pakistan. Looking ahead, lower commodity prices and stabilizing currencies should limit price pressures.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2025 to 2012.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| External Debt (% of GDP) | 23.8 | 22.2 | 21.4 | 21.3 | 21.6 |
| Private Consumption (annual variation in %) | -4.2 | 10.9 | 7.3 | 4.8 | 6.9 |
| 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 |
| 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 |
| Merchandise Imports (USD bn) | 503 | 762 | 886 | 809 | 856 |
| Public Debt (% of GDP) | 82.1 | 78.1 | 77.5 | 77.4 | 76.9 |
| Merchandise Exports (USD bn) | 357 | 502 | 548 | 528 | 527 |
| International Reserves (USD bn) | 644 | 679 | 624 | 686 | 714 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | 5.3 | 5.6 | 5.5 |
| Policy Interest Rate (%, eop) | 4.35 | 4.59 | 7.27 | 7.81 | 7.14 |
| Inflation (CPI, ann. var. %, aop) | 6.4 | 5.9 | 8.6 | 7.9 | 5.7 |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 5.9 | 6.3 |
| Current Account Balance (% of GDP) | 0.4 | -1.2 | -2.4 | -0.9 | -0.6 |
| Merchandise Trade Balance (USD bn) | -146 | -260 | -338 | -281 | -329 |