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World Bank acknowledges faster economic recovery in Pakistan and Sri Lanka

ISLAMABAD: The World Bank has raised its 2024 growth forecast for South Asia to 6.4%, up from an earlier estimate of 6%, citing strong domestic demand in India and faster recoveries in crisis-stricken countries like Sri Lanka and Pakistan.

India’s economic growth for the fiscal year ending in March 2025 has been revised upward to 7% year-on-year, from April’s estimate of 6.6%. This improvement is driven by a rebound in agricultural output and increased private consumption.

“There’s an emerging consumer class in India driving economic momentum, along with recoveries in Sri Lanka and Pakistan. Additionally, tourism is helping fuel recovery in Nepal and Bhutan,” said Martin Raiser, World Bank Vice President for South Asia, in an interview with Reuters.

This upward revision cements South Asia as the fastest-growing emerging economy region monitored by the World Bank. The Washington-based institution forecasts robust growth of 6.2% annually for the region over the next two years.

Raiser noted that there is “significant upside potential” for growth, especially if South Asian countries further integrate into the global economy. However, he emphasized the importance of continuing economic reforms to maintain this momentum.

On Wednesday, India’s central bank maintained its GDP growth forecast at 7.2% for the current fiscal year and shifted its policy stance to neutral.

Pakistan’s economy is expected to grow by 2.8% in the current fiscal year, which began in July, up from a previous estimate of 2.3%. The recovery is being driven by improved manufacturing and an easing of monetary policy.

Sri Lanka, recovering from a sovereign debt default and its worst economic crisis in decades, saw the most significant upward revision, with growth projected at 4.4% for this year and 3.5% in 2025.

Nepal’s growth forecast was increased to 5.1% from 4.6% for the fiscal year starting in mid-July 2024, while Bhutan’s forecast was raised to 7.2% from 5.7%.

However, Bangladesh’s growth forecast was cut to 4.0% from 5.7% for the 2024/25 fiscal year, reflecting a slowdown in garment exports and social unrest.

The World Bank also recommended that the region focus on increasing women’s labor force participation, which is currently the lowest globally at 32%. The report suggests that bringing women’s employment to levels comparable to men’s could boost long-term output by up to 50%.

“Increasing female workforce participation could significantly enhance the region’s production capacity,” Raiser said.

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I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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