new Delhi: The Asian Development Bank on Wednesday projected a collective growth of 7 per cent for South Asian economies in 2022, with the sub-region’s largest economy India set to grow by 7.5 per cent in the current fiscal to 8 per cent next year.
Releasing its flagship Asian Development Outlook (ADO) 2022, the Manila-based multi-lateral funding agency said growth in South Asia is projected to slow to seven per cent in 2022, before reaching 7.4 per cent in 2023.
The growth dynamics of the sub-region is largely driven by India and Pakistan.
“South Asian economies are expected to collectively expand by seven per cent in 2022 and 7.4 per cent in 2023, with India – the largest economy of the sub-regions – growing at 7.5 per cent this fiscal year (FY23) and eight per cent per annum. is expected in the next financial year (FY24),” the agency’s ADO report said.
It said Pakistan’s growth is projected to be at 4 per cent in 2022 on weak domestic demand from monetary consolidation and fiscal consolidation, before rising to 4.5 per cent in 2023.
ADB said economies in developing Asia are projected to grow 5.2 percent this year and 5.3 percent in 2023, thanks to a strong recovery in domestic demand and continued expansion in exports.
“However, the uncertainties arising from the Russian invasion of Ukraine, the continuing coronavirus disease (Covid-19) pandemic, and tightening by the United States Federal Reserve pose risks to the outlook,” ADB Outlook said.
Developing Asia includes 46 member countries of the ADB by geographic grouping: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia, and the Pacific. South Asia includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
“Economies in developing Asia are gaining ground as they slowly emerge from the worst of the COVID-19 pandemic,” said Albert Park, ADB’s chief economist.
However, geopolitical uncertainty and the new outbreak of COVID-19 and the form of the virus may derail this momentum.
“Governments in the region will need to be vigilant and prepared to take steps to counter these risks. This includes ensuring that as many people as possible are fully vaccinated against COVID-19. Monetary officials should also continue to closely monitor their inflation situation and not fall behind the curve,” Park said.