The World Bank’s Bi-Annual South Asia Economic Focus report recently presented a revised economic growth forecast for India and the broader South Asian region. Offering insights into recent economic developments, factors influencing GDP growth in South Asia, and issues pertaining to women, the report offers a comprehensive economic perspective of the region.
GDP Estimates in the World Bank Report
The latest report from the World Bank has reduced India’s growth estimate from the previously predicted 8.7% to 8% for the fiscal year 2022-23. Simultaneously, it noted a full one percent point reduction in the growth outlook for South Asia, excluding Afghanistan, bringing it down to 6.6%. Interestingly, Pakistan, the region’s second-largest economy, saw its growth forecast for the year ending in June raised to 4.3% from 3.4%, with the following year’s outlook remaining stable at 4%.
Reasons behind Low GDP Estimates
Several factors have contributed to these lowered GDP estimates. The ongoing Ukraine crisis has worsened supply chains and spiked inflation risks globally. Within India, incomplete labour market recovery from the pandemic and burgeoning inflation pressures are expected to constrain household consumption. Elevated oil and food prices due to the war in Ukraine will negatively impact people’s real incomes. As the region relies heavily on energy imports, soaring crude prices have shifted the focus of its economies from renewing economic growth to addressing inflation, following nearly two years of pandemic constraints.
Understanding Gross Domestic Product (GDP) and Gross Value Added (GVA)
Gross Domestic Product (GDP) measures a country’s total value of annual output of goods and services, representing the economic output from the consumers’ side. It’s calculated as the sum of private consumption, gross investment, government investment, government spending, and the net of exports and imports.
Gross Value Added (GVA), meanwhile, provides the value of goods and services produced in an economy after deducting input and raw material costs. GVA offers a sector-specific growth picture and is calculated as the GDP plus subsidies on products minus taxes on products at the macro level.
Women-Related Findings from the Report
The World Bank report highlights several issues related to women’s socio-economic conditions in the South Asian region. Traditional outlooks and social norms, which have either persisted or grown more conservative over time, create significant hurdles for gender equality and broader economic growth.
Despite years of economic growth and increases in education access and declining fertility rates, women continue to face substantial disadvantages in accessing economic opportunities. South Asian countries often rank among the world’s lowest in female labour force participation and other gender disparity indicators, such as freedom of movement, social interactions, asset ownership, and son preference.
Suggested Economic Strategies and Interventions
The World Bank report suggests several strategic moves to counter these economic challenges. Governments are urged to meticulously plan their monetary and fiscal policies to minimize the impact of external shocks and protect vulnerable populations.
To address the identified barriers to women’s economic participation, implementation of intervention measures is recommended, with a particular focus on biased norms. Furthermore, a transition towards low-carbon development and a greener economy can reduce reliance on fuel imports and offer sustainable growth prospects for South Asia.