South Asia Economic Outlook
In 2025, GDP growth is set to weaken as the economies of Bangladesh, India and Sri Lanka slow. That said, regional growth should remain above the 5.7% average of the 10 years prior to 2024 because populations should continue to expand sharply and foreign investment should continue to flow. The weather is a key risk as it can significantly impact agricultural output.
South Asia Inflation
In November, inflation fell in Pakistan and Sri Lanka, reaching the lowest rate since the global energy crisis began in late 2021. In Bangladesh, however, inflation rose to the second-highest level in 13 years, as floods hit agricultural supply. Our Consensus is for regional inflation to fall below its 10-year average of 5.7% in 2025 as food prices fall.
This chart displays Economic Growth (Real GDP, ann. var. %) for South Asia from 2011 to 2020.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Industrial Production (ann. var. %) | 0.5 | -7.0 | 11.3 | 5.8 | 6.2 |
| Unemployment (% of active population, aop) | 5.6 | 6.1 | 5.9 | - | - |
| Fiscal Balance (% of GDP) | -4.6 | -7.8 | -5.7 | -5.5 | -5.0 |
| Public Debt (% of GDP) | 71.2 | 82.0 | 78.0 | 77.0 | 78.7 |
| Inflation (CPI, ann. var. %, aop) | 5.3 | 6.4 | 5.9 | 8.6 | 7.9 |
| Policy Interest Rate (%, eop) | 5.30 | 4.30 | 4.57 | 7.46 | 7.84 |
| International Reserves (USD bn) | 534 | 644 | 679 | 624 | 686 |
| External Debt (% of GDP) | 21.8 | 23.8 | 22.2 | 21.3 | 21.6 |
| Current Account Balance (% of GDP) | -1.2 | 0.4 | -1.2 | -2.4 | -0.9 |
| Merchandise Exports (USD bn) | 389 | 357 | 502 | 548 | 528 |
| Merchandise Imports (USD bn) | 601 | 503 | 762 | 886 | 809 |
| GDP per Capita (USD) | 2,019 | 1,906 | 2,211 | 2,324 | 2,389 |
| Economic Growth (Real GDP, ann. var. %) | 4.1 | -4.3 | 8.9 | 6.7 | 7.1 |
| 5.1 | -4.2 | 10.9 | 6.7 | 3.6 | |
| 0.3 | -5.9 | 15.1 | 6.4 | 6.2 |