South Asia Economic Outlook
Our panelists cut their forecasts for South Asia’s GDP growth this year for the third consecutive month; Trump’s tariffs are set to hurt exports by raising trade barriers and by hitting global GDP growth and therefore external demand. GDP growth is now seen dipping to the 10-year average of 5.7%. Trade talks with the U.S. are key to watch ahead.
South Asia Inflation
Regional inflation declined to 3.4% in April (March: 3.6%), further trending down from a peak of 10.0% reached in Q3 2022. This year, oil and food prices should fall, easing inflation below its past-decade average of 5.7%. That said, upside risks include poor weather hitting crop yields plus snarled global supply chains as a result of rising protectionism.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2010 to 2024.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| 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 | 4.9 | 7.0 |
| Investment (annual variation in %) | -5.9 | 15.1 | 7.9 | 6.0 | 6.3 |
| Fiscal Balance (% of GDP) | -8.6 | -6.4 | -6.4 | -5.6 | -4.8 |
| Industrial Production (ann. var. %) | -7.0 | 11.3 | 5.8 | 6.2 | 4.0 |
| Unemployment (% of active population, aop) | 5.9 | 5.7 | - | - | - |
| 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 |