DHAKA, July 21 (Xinhua) -- The Asian Development Bank (ADB) lowered its 2022 economic growth outlook for South Asia as the region grapples with the COVID-19 pandemic fueled by the Ukraine conflict, according to an update to Asian Development Outlook (ADO) released on Thursday.
The report says South Asia's economy is expected to expand less than ADO 2022's projection. This mainly reflects a modest downward revision to the forecast of India's gross domestic product (GDP) growth due to higher-than-anticipated inflation since April and monetary tightening, and Sri Lanka's sharp GDP contraction due to the country's sovereign debt and balance-of-payment crises, it said.
The growth prospects for the subregion's other economies are largely unchanged as various positives balance out global headwinds, said the Manila-based lender.
"On balance, the growth forecast for South Asia is revised down from 7.0 percent to 6.5 percent for 2022 and from 7.4 percent to 7.1 percent for 2023."
In Bangladesh, according to the ADO, the latest official estimates for FY2022 ending June 30, 2022 show the GDP growth at 7.2 percent, surpassing ADO 2022's 6.9 percent projection.
The growth was driven by industry (10.4 percent) and services (6.3 percent). Bangladesh's agriculture output, however, fell to 2.2 percent.
Exports and imports were stronger than expected, reflecting a faster recovery in economic activity and private investment. This recovery is also being supported by rising credit to the private sector.
The latest official estimates show that Nepal's economy grew by 5.8 percent in FY2022 ending on July 15, 2022, higher than ADO 2022's projection.
The estimate is underpinned by an ongoing vaccination campaign that has fostered a gradual normalization in economic activity and a steady path to higher growth supported by accommodative macroeconomic policies.
The GDP growth for Pakistan is expected to moderate in FY2022 ending June 30, 2022) on fiscal tightening measures to manage growing demand pressures and contain external and fiscal imbalances.
The growth is projected to recover slightly in FY2023, supported by structural reforms. In Afghanistan, sanctions and the freeze on international development assistance other than humanitarian aid have significantly constrained economic activity.
However, South Asia's inflation forecast is revised from 6.5 percent to 7.8 percent for 2022 and from 5.5 percent to 6.6 percent for 2023 on expectations that global prices for fuel, food, and other commodities will remain elevated and due to domestic factors in some economies. ■
