Friday 29th of March 2024
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   Business
South Asia`s recovery continues as global demand rebounded: WB
  Date : 29-03-2024

Online Desk : The recovery of South Asia including that of Bangladesh continues as global demand rebounded and targeted containment

measures helped minimize the economic impacts of the recent waves of Covid- 19. But, the recovery remains fragile and uneven, and most countries are far from pre-pandemic trend levels, says the World Bank in its twice-yearly regional update.

The latest South Asia Economic Focus titled Shifting Gears: Digitization
and Services-Led Development projects the region to grow by 7.1 percent in 2021 and 2022.

While the year-on-year growth remains strong in the region, albeit from a very low base in 2020, the recovery has been uneven across countries and sectors.

South Asia`s average annual growth is forecast to be 3.4 percent over 2020-23, which is 3 percentage points less than it was in the four years precedingthe pandemic, said a World Bank press release.

In Bangladesh, continued recovery in exports and consumption will help
growth rates pick up to 6.4 percent in fiscal year 2021-22. In Maldives, GDP is projected to grow by 22.3 percent in 2021, as tourism numbers recover.

India`s economy, South Asia`s largest, is expected to grow by 8.3 percent in the fiscal year 2021-22, aided by an increase in public investment and incentives to boost manufacturing.

"The pandemic has had profound impacts on South Asia`s economy. Going
forward, much will depend on the speed of vaccination, the possible emergence of new Covid variants, as well as any major slowdown in the momentum of global growth," said Hartwig Schafer, World Bank Vice President for the South Asia Region.

"While short-term recovery is important, policymakers should also seize the
opportunity to address deep-rooted challenges and pursue a development path
that is green, resilient and inclusive." he added.

COVID-19 has left long-term scars on the region`s economy, the impacts of
which can last well into the recovery.

Many countries experienced lower investment flows, disruptions in supply
chains, and setbacks to human capital accumulation, as well as substantial
increases in debt levels.

The update said the pandemic is estimated to have caused 48 to 59 million
people to become or remain poor in 2021 in South Asia.

As countries build back, they have a chance to rethink their long-term
development models.

With the emergence of new digital technologies, South Asia has an
opportunity to shift gears from a traditional manufacturing-led growth model
and capitalize on the potential of its services sector.

The role of services in the region`s economy has been increasing amid rapid
technological change and the accelerated structural transformation of global
economic activity in response to the pandemic.

The adoption of digital technologies makes services more tradable, enables
services to increase productivity of other sectors-including manufacturing--
and creates new markets.

Some South Asian countries are increasingly providing business and
professional services that add value to manufacturing and play a key role in
global value chains.

"Countries in South Asia have a strong comparative advantage in exporting
services, particularly business processes and tourism, whereas they have
struggled to break into manufacturing export markets," said Hans Timmer,
World Bank Chief Economist for the South Asia Region.

"To realize the potential of the services-led development, the region needs
to rethink regulations and establish new institutions to support innovation
and competitiveness." added Timmer. BSS



  
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