South Asian region would have faster economic growth in 2010-11

On June 7, 2010, World Bank published its first yearly assessment of the economies of the South Asian region. The report said that South Asia would observe a 7 percent growth in 2010 and 8 percent in 2011 which makes it the “second-fastest growing region” after East Asia and Pacific.

In 2011, Sri Lanka would observe higher than 6% economic growth, India 9, Bangladesh 6.4%, and Bhutan 7%. Emerging markets would play a major role in economic growth.

The report said that South Asia’s “particular strengths and forms of global integration” is a major factor behind its resilience following the economic recession of 2008.

Andrew Steer, World Bank Acting Chief Economist for the South Asia Region said, “Over the past fifteen years the region has become much more open-and it appears that the form of openness it has chosen has provided resilience in the face of recent shocks……Financial systems proved to be robust with limited exposures to overseas subprime markets. Remittances, exports of goods and services such as in the IT and garment sectors, and foreign direct investments kept up during the crisis. At the same time, policy response in most countries played a key role in boosting confidence and accelerating recovery."

Ernesto May, Sector Director for Economic Policy for the South Asian Region said that the region is facing a very different global economy over the medium term. He said that out of the current crisis, a “new normal” would emerge as developing countries are saving more and spending less. Countries like Europe and North America are making huge fiscal and financial adjustment. In such a condition, Asia and other emerging markets will play more important part in economic growth.