October 21, 2008 - Over the last 10 years, South Asia witnessed a rapid and robust growth of more than six percent per annum, which enabled millions of people to escape poverty. In 2006, the region recorded a growth rate of nine percent – the highest in the last 25 years.
However, in the last five years, price increases of global commodities, especially those of oil, metal, and food, took a toll on South Asia. Budget deficits widened and trade balances worsened. With this, the growth softened and inflation reached double digits. Before the region could recover from the adverse impact of high commodity prices, the global financial crisis has come knocking. The cascading effects of these crises will present daunting policy challenges to South Asia.
The adverse impact has the potential to reverse elements of the impressive development gains that South Asia has achieved over the past decade and impede its progress towards achieving the Millennium Development Goals (MDGs).
“The slowdown in the global economy will adversely impact South Asian exports and thus foreign earnings,” said Sadiq Ahmed, World Bank Acting Chief Economist for the South Asia region. “Coupled with lower foreign capital flows and domestic investment, this will significantly reduce growth for South Asia.” (Download Analysis - pdf)
Additional Resources
- World Food Prices: South Asia's poor at risk
Expanding existing social assistance programs that directly targets poor households is necessary to protect South Asia’s poor. (Read More »)
- World Food Prices: Revival of Agriculture is Key
In recent years agricultural growth in South Asia has been less than 3 percent, far below the growth rates of other economic sectors. (Read More »)
- U.S. Subprime Mortgage Crisis: South Asia will continue to grow
The impact will be mild because of the structure of the region’s trade and financial flows, and partly because of compensating effects. (Read More »)
- South Asia: Development Data
A wide range of social and economic measures on South Asia, including links to the World Bank's most important online development databases. (Read More »)
- South Asia: Analysis and Research
Compilation of all the World Bank's publications on South Asia, with 'search' options and links to analysis and research on other South Asian countries. (Read More »)
- World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.(Read More »)
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