Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). Find Out

Overview

  • As COVID-19 spreads across the region, South Asia’s economic outlook is dire.

    The region will likely experience its worst economic performance in the last 40 years, with temporary contractions in all eight countries.

    According to the latest Global Economic Prospects,   GDP in the region is projected to contract by 2.7 percent in 2020 as pandemic mitigation measures hinder consumption and services activity and uncertainty about the course of the pandemic chills private investment.

    In India, growth is estimated to have slowed to 4.2 percent in FY 2019/20, which ended in March 2020. Output is projected to contract by 3.2 percent in FY 2020/21, when the impact of the pandemic will largely hit. Pakistan (-2.6 percent in FY 2019/20) and Afghanistan (-5.5 percent) are both projected to experience contractions, as mitigation measures are anticipated to weigh heavily on activity. Growth in Bangladesh (1.6 percent in FY 2019/20) and Nepal (1.8 percent in FY 2019/20) is expected to decelerate markedly due to pandemic-related disruptions including mitigation measures and sharp falls in exports and remittance inflows.

    Note: Due to the COVID-19 pandemic, economic circumstances within countries and regions are fluid and change on a day-by-day basis. The analysis in the latest Global Economic Prospects report is based on the latest country-level data available as of June 2020.

    Last Updated: Jul 28, 2020


    REAL GDP AT MARKET PRICES IN PERCENT

    Country

    Fiscal year

    2019(e)

    2020(f)

    2021(f)

    2022(f)

    Afghanistan

    December to December

    2.9

    -5.9 to -3.8

    3.3 to 3.9

    5.2 to 6.2

    Bangladesh

    July to June

    8.2

    2.0 to 3.0

    1.2 to 2.9

    2.8 to 3.9

    Bhutan

    July to June

    3.9

    2.2 to 2.9

    2.0 to 2.5

    3.1 to 3.5

    India

    April to March

    6.1

    4.8 to 5.0

    1.5 to 2.8

    4.0 to 5.0

    Maldives

    January to December

    5.2

    -13.0 to -8.5

    6.3 to 7.3

    5.0 to 5.5

    Nepal

    mid-July to mid-July

    7.1

    1.5 to 2.8

    1.4 to 2.9

    2.7 to 3.6

    Pakistan

    July to June

    3.3

    -2.2 to -1.3

    0.3 to 0.9

    3.2 to 3.3

    Sri Lanka

    January to December

    2.6

    -3.0 to -0.5

    0.2 to 1.2

    2.0 to 2.5

     

    REVISION TO FORECASTS FROM OCTOBER 2019

    Country

    Fiscal year

    2019(e)

    2020(f)

    Afghanistan

    December to December

    -8.9 to -6.8

    -0.2 to 0.4

    Bangladesh

    July to June

    -5.2 to -4.2

    -6.1 to -4.4

    Bhutan

    July to June

    -5.2 to -4.5

    -3.9 to -3.4

    India

    April to March

    -1.2 to -1.0

    -5.4 to -4.1

    Maldives

    January to December

    -18.5 to -14.0

    0.7 to 1.7

    Nepal

    mid-July to mid-July

    -4.9 to -3.6

    -5.1 to -3.6

    Pakistan

    July to June

    -4.6 to -3.7

    -2.7 to -2.1

    Sri Lanka

    January to December

    -6.3 to -3.8

    -3.5 to -2.5

    Notes: The 2020 and 2021 numbers represent the lower and upper bound of the forecast range. For India, 2020 refers to FY19/20. e: Estimate f: Forecast. Source: World Bank. 

    World Bank Assistance

    The Bank’s strategy in South Asia emphasizes The Bank’s strategy in South Asia emphasizes promoting sustainable and inclusive growth, investing in people, and strengthening resilience. It focuses on supporting policy reforms for private sector–led job creation; addressing stunting with multisectoral solutions; increasing female labor force participation; supporting refugees, returnees, and internally displaced persons; and addressing climate risks, including through disaster preparedness and management.

    In fiscal year 2019, the World Bank approved $8.9 billion in lending to the region for 54 operations in fiscal 2019, including $4.0 billion in IBRD loans and $4.9 billion in IDA commitments.

    The Bank also delivered 178 advisory services and analytical products to eight countries, totaling $79 million, providing technical advice on issues such as energy sector reform, female labor force participation, and climate change.

    Last Updated: Apr 11, 2020


    GNI per capita, Atlas method (current US$)

  • COVID-19 response

    The World Bank Group is taking broad, fast action to help developing countries around the world strengthen their pandemic response and health care systems. This includes a $14 billion fast-track package to respond to immediate COVID-19 health and economic needs, and up to $160 billion in financial support over the next 15 months – with an emphasis on policy-based financing and protecting the poorest households and the environment.

    The first group of projects totaling $1.9 billion for 25 countries was approved by the Board on April 2. These projects will help save lives, detect, prevent and respond to COVID-19 in developing countries.  More projects were approved since then.

    All eight countries of South Asia requested emergency support from the World Bank, which has worked closely with government officials to ensure support is tailored to country circumstances and meets their specific needs.

    As of today, The World Bank has committed more than $1.5 billion to seven countries of South Asia to help governments respond to the immediate health impacts of the pandemic and protect their people:

    This emergency funding is supporting training of emergency care doctors, nurses and paramedics; purchasing of personal protective equipment, medical and laboratory equipment and medicines; more testing and better contact tracing for early detection and rapid response;  increasing the number of intensive care units and isolation wards as well as cash transfers and food rations for the most vulnerable

    In addition, The World Bank is redirecting resources from existing World Bank-financed for the most immediate needs.

    Our phase-two support will focus on the needs beyond the health emergency, to provide economic support to the countries that will be hit by recession, to support growth, businesses, and jobs.

    Supporting sustainable growth and creating jobs

    The region can sustain high growth only if both investments and exports grow stronger.

    With an estimated 1.5 million people entering the job market every month over the next two decades, job creation is essential.

    To address these challenges, the Bank has been supporting efforts such as the $250 million Jobs Programmatic Development Policy Project in Bangladesh to address jobs challenges and strengthen systems that protect workers and build resilience.

    In Afghanistan, the $100 million Women’s Economic Empowerment Rural Development Project aims to increase the social and economic empowerment of poor rural women.

    The Bank Group is also helping countries maximize their development resources by drawing on sustainable private sector solutions.

    In Nepal, a $100 million project—the first in a series of two—is supporting the financial viability and governance of the electricity sector, while the IDA18 IFC-MIGA Private Sector Window will provide $103 million in financing and guarantees for the Upper Trishuli-1 Hydropower Plant, lowering risk and encouraging the private sector to invest.

    In India, the $400 million Innovation in Solar Power and Hybrid Technologies Project supports renewable energy and battery energy storage solutions.

    Investing in people and supporting inclusive growth

    To strengthen human capital as a driver of growth, the Bank is helping the region improve access to and quality of education, address childhood stunting and malnutrition, strengthen health systems and services, and expand safety nets to protect the poorest.

    Alongside development partners, we organized human capital summits in Bhutan, Nepal, and Pakistan.

    The new Pakistan@100: Shaping the Future report emphasized the country’s urgent need to invest more and better in its people, if they are to be richer, better educated, and healthier by 2047.

    Meanwhile, initiatives such as the $400 million Program toward Elimination of Tuberculosis in India build on earlier efforts to improve the quality and accessibility of health and nutrition services.

    Fostering resilience to conflict and climate change

    Conflict and fragility risks are increasing in South Asia, resulting in greater displacement and growing border tensions.

    We are working with partners to provide basic services to the displaced and hosting communities, such as the $200 million grant for the Afghanistan Eshteghal Zaiee–Karmondena Project, which aims to strengthen jobs and economic opportunities in cities with a high influx of displaced people.

    South Asia is also highly vulnerable to the impacts of climate change, including climate-induced natural disasters and rising sea levels.

    The South Asia’s Hotspots: Impacts of Temperature and Precipitation Changes on Living Standards report suggests that 800 million people in the region live in areas where livelihoods are vulnerable to climate change impacts.

    Progress depends on reducing carbon emissions, changing the energy mix, mitigating the effects of climate change, and building resilience.

    For example, the $125 million Climate-Smart Irrigated Agriculture Project in Sri Lanka will improve agricultural productivity and diversification through the adoption of climate-smart practices and better water management.

    The $246 million Andhra Pradesh Integrated Irrigation and Agriculture Transformation Project in India aims to enhance productivity, profitability, and climate resilience for smallholder farmers.

    The $175 million Bangladesh Sustainable Forests and Livelihoods Project will improve forest management and increase benefits for forest-dependent communities, with emphasis on women and adolescent girls.

    Promoting regional integration

    South Asia remains one of the least economically integrated regions in the world.

    Hence we support cross-border trade, transport and energy connectivity, and longterm water security and environmental sustainability in the region.

    The $460 million Khyber Pass Economic Corridor Project aims to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development along this key corridor.

    The Exports to Jobs: Boosting the Gains from Trade in South Asia report analyzes how labor market policies can help various groups of workers acquire the right skills and ensure that the gains of increased exports are shared more broadly across societies.

    Our report, A Glass Half Full: The Promise of Regional Trade in South Asia, unpacks critical barriers to trade integration and offers precise, actionable policy recommendations that could help achieve measurable progress in key areas of trade and integration, benefiting all countries in the region.

    Last Updated: Apr 11, 2020

  • World Bank support has helped South Asia achieve the following results, among others:

    • Afghanistan: Bringing most of the efforts in public health service delivery under one umbrella in Afghanistan, the Sehatmandi (Health) Project aims to increase the utilization and quality of health, nutrition, and family planning services across Afghanistan. The project supports implementation of a Basic Package of Health Services and an Essential Package of Hospital Services through contracting arrangements across the country. Sehatmandi also supports efforts to strengthen the capacity of the Ministry of Public Health at central and provincial levels to effectively carry out its stewardship functions.
    • Bangladesh: Bangladesh has made remarkable gains in ensuring access to basic and secondary education in the past two decades. In 2015, the country’s net enrollment rate at the primary school level reached above 90 percent, and that at secondary school level, around 62 percent. With nearly 6.4 million girls in secondary schools in 2015, Bangladesh is among the few countries to achieve gender parity in school enrollment and has more girls than boys in secondary schools.
    • India: Since 2000, World Bank projects have contributed over $3.4 billion in financing for rural water supply and sanitation.  This has helped about 36 million people in 40,000 villages—with populations ranging from 150 to 15,000—gain better access to drinking water. 
    • Nepal: 85 percent of the rural population has access to clean water and 81 percent has access to sanitation.
    • Pakistan: The Punjab Skills Development Program supported by World Bank aims to support employability of youth of Punjab. It has developed more than 30 competency-based learning assessments in priority sectors, with at least 80 public and private institutes offering these courses, and having trained 16,000 graduates.
    • Sri Lanka: Climate-related hazards pose a significant threat to economic and social development in Sri Lanka. The ongoing Climate Resilience Improvement Project (CRIP) carried out rehabilitation works related to irrigation hydraulic infrastructures benefiting 50,000 hectares of agricultural land, landslide mitigation works in 18 schools protecting 30,000 students while establishing transport connectivity for 750,000 people by rehabilitating roads damaged by landslides and floods.

     

    SPOTLIGHT: MAKING NEPAL AN ATTRACTIVE DESTINATION FOR INVESTMENT

    Image

    Four years ago, Nepal was reeling from a devastating earthquake that claimed thousands of lives. Today, its future looks considerably brighter.

    Extreme poverty is steadily falling, and growth has remained relatively strong for the last two years. For the first time in decades, Nepal also has a stable, majority government to carry out a long-term development vision.

    New laws aim to encourage foreign direct investment, improve the business climate, and protect intellectual property.

    This combination of factors helped attract more than 700 foreign investors from over 300 companies representing 40 countries at the Nepal Investment Summit, organized by the government in March 2019. When the summit concluded, some 15 deals had been signed to develop hydro and solar power, 5G network services, a high-end resort, grain storage warehouses, and public-private partnerships.

    Investors’ applications were also received for 11 other projects in response to the 77 that were showcased by the government.

    The Bank Group hosted a pre-summit roadshow in Malaysia and Singapore to help raise interest among investors in those countries. The Bank Group’s financial and technical support for the summit reaffirms the 50-plus year engagement with Nepal and supports our commitment to the country’s ambitious goal of becoming a middle-income country by 2030.

    Last Updated: Oct 11, 2019

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