South Asia, excluding Afghanistan, is expected to grow at a rate of 6.1% in 2025, making it the fastest-growing region in the world for the next two years. This growth is attributed to modest recoveries in reserves, remittances, and tourism. The World Bank’s latest report on South Asia also predicts that Sri Lanka’s economy will continue to strengthen, with real GDP growth expected to reach 2.5% in 2025.
The crisis-ridden nation experienced a faster-than-expected recovery from its worst financial crisis in decades after receiving a $2.9 billion bailout from the International Monetary Fund (IMF) in March of last year. As a result of the IMF program, Sri Lanka is expected to return to growth this year after experiencing a 2.3% contraction in 2023. The positive outlook for Sri Lanka’s economy comes as it experiences a faster-than-expected recovery from its worst financial crisis in decades.
Meanwhile, Pakistan’s growth outlook is more conservative, with the World Bank predicting a growth rate of 1.8% for fiscal year 2024, which is lower than the State Bank of Pakistan’s projection of 2%-3%. Real GDP is expected to expand by 2.3% in fiscal year 2025, according to the report.
