ISTANBUL

The World Bank revised South Asia's economic growth forecast for 2023 to 5.8%, up from a previous projection of 5.6%, higher than any developing region on the globe.

"Global output growth continues to slow, but this has had only limited spillovers to South Asia, thus far," the institution said in its South Asia Development Update report. "Most countries are making solid progress, with the exception of a few countries recovering from recent balance-of-payments crises."

The World Bank, however, said inflation has remained elevated in South Asia although it has been declining in the rest of the world.

"Food inflation in the region remains particularly high owing to both high global food inflation and local supply disruptions. As currencies have stabilized and some import controls have been relaxed, inflation is expected to trend down throughout the region," it said.

In India, which accounts for the bulk of the region’s economy, growth is expected to remain robust at 6.3% in the 2023-24 fiscal year, while economic growth in Pakistan is forecast at 1.7%, it said.

"While South Asia is making steady progress, most countries in the region are not growing fast enough to reach high-income thresholds within a generation," World Bank Vice President for South Asia Martin Raiser said in a statement. "Countries need to urgently manage fiscal risks and focus on measures to accelerate growth, including by boosting private sector investment and seizing opportunities created by the global energy transition."

The World Bank revised its 2024 growth forecast for South Asia to 5.6%, from its previous projection of 5.9%.

The region recorded a strong economic growth rate of 8.2% last year.