The World Bank ‘Global Economic Prospects’ report predicts that South Asia region is expected to post robust 5.6% economic growth pace in 2024, before firming to 5.9% in 2025 while Sri Lanka economy to grow by 1.7% in 2024 and by 2.4% in 2025, The growth in South Asia remains the fastest among emerging markets and developing economy regions, according to the World Bank. According to the World Bank, Sri Lanka’s economy is estimated to have recorded a negative growth of 3.8 percent in 2023. Credit to the private sector remained subdued throughout last year, adversely affecting activity. With weaker demand, consumer price inflation declined, and the central bank started to reduce policy rates from mid-2023.
“Progress was also made in sovereign debt restructuring, as the authorities reached agreements with major official creditors, including China and the Paris Club, as well as the implementation of a domestic debt optimization plan,” the World Bank said.
“However, it said the outlook for Sri Lanka remains uncertain amid debt restructuring negotiations, particularly with private creditors.”
In Sri Lanka, the economic outlook remains uncertain, amid debt restructuring negotiations with private creditors and the implementation of structural reforms to improve growth potential.
Maldives’ economy is projected to expand by 5.2 percent in 2024 and 5.5 percent in 2025. A continued recovery in tourism from major economies, including China, is expected to contribute to robust growth. In Bhutan, growth is expected to slow to 4 percent in FY 2023/24 (July 2023 to June 2024), partly reflecting reductions in public investment and capital expenditure. Despite this, the economy will still benefit from a strong performance in tourism related services.
In Nepal, growth is projected to pick up to 3.9 percent in FY 2023/24 (mid-July 2023 to mid-July 2024) and 5 percent in FY 2024/25. Expansion of industrial and services activities will drive Nepal’s economy. India is anticipated to maintain the fastest growth rate among the world’s largest economies, but its post-pandemic recovery is expected to slow, with estimated growth of 6.3 percent in FY 2023/24. Growth is then expected to recover gradually, edging up to 6.4 percent in FY 2024/25 and 6.5 percent in FY 2025/26. Interest payments are projected to be large in countries with elevated debt levels, including India, Pakistan, and Sri Lanka.
