South Asia Economic Outlook
Over the past month, our panelists cut their 2025 regional GDP growth forecasts for the first time so far this calendar year, as gloom deepened over the outlook for Bangladesh’s economy amid recent political upheaval. Overall, our panelists see economic momentum softening for the second year in a row on decelerations in Bangladesh and India.
South Asia Inflation
In October, inflation rose in Bangladesh and Pakistan but fell in Sri Lanka. Bar Bangladesh—where inflation in October was the second-highest in 13 years—inflation in South Asian countries has trended down recently. Our panelists see regional inflation dipping further below its 10-year average of 5.7% in 2025 as food prices fall. Extreme weather is an upside risk.
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 | -8.2 | -6.1 | -5.9 | -5.3 |
| 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 | - |
| Current Account Balance (% of GDP) | -1.2 | 0.4 | -1.2 | -2.4 | -0.9 |
| Merchandise Exports (USD bn) | 389 | 492 | 502 | 548 | 528 |
| Merchandise Imports (USD bn) | 601 | 789 | 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 |