The Hindu : World Bank pegs South Asia growth at 4.6 p.c.

Online edition of India's National Newspaper
Thursday, Dec 12, 2002

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World Bank pegs South Asia growth at 4.6 p.c.

NEW DELHI DEC. 11. The World Bank today pegged the overall economic growth prospect of India and other nations in South Asia at 4.6 per cent in 2002, but said it would go up to 5.4 per cent in 2003 and further to 5.8 per cent in 2004.

"The recent global economic slowdown, adverse weather conditions, internal and external security concerns reduced growth figures for the South Asia region in 2002,'' the World Bank said in a report.

The report `Global economic prospects and developing countries 2003: Investing to unlock global opportunities' said GDP growth in South Asia is expected to average 4.6 per cent in this year, which is lower than 5.3 per cent projected in last year's report.

The lowering of growth projections assumes importance in view of lowering of India's growth projection by private and multilateral agencies to 5-5.5 per cent for this fiscal due to drought and other factors. Earlier, India's growth projection was pegged at 6-6.5 per cent for 2002-03.

Lower growth prospects of India, which contributes about 85 per cent economic produce in the region, appears to have pulled down the overall growth prospects of the region.

"However, future growth prospects appear brighter. South Asia should achieve an average of 5.4 per cent growth in 2003 and 5.8 per cent in 2004,'' the report said.

The World Bank South Asia's chief economist, Sadiq Ahmed, said, "this improvement in growth prospects is premised upon a return to normal weather patterns, an improvement in political stability and regional security aspects thereby facilitating faster implementation of reforms, and a recovery in world trade volumes.''

With decline in Indo-Pak tension, easing of tensions in Sri Lanka, things will look a little bit better in South Asia, World Bank senior economist, Dominique van der Mensbrugghe, told reporters here.

"There are tremendous growth potential for India and other countries in the South Asia region. The reforms are moving forward and tariff rates are coming down. There is no reason why South Asia cannot grow faster,'' he said.

The GDP growth prospects of the South Asia region is still higher than 2.5 per cent growth in global GDP during 2003, the report said.

"High-income countries are expected to grow at about 2.5 per cent in 2003. On an average, developing countries will grow considerably faster at 3.9 per cent. But the average masks wide regional difference with East Asia leading the pack at 6.1 per cent followed by South Asia at 5.4 per cent,'' the World Bank said.

"Latin America is expected to grow at a mere 1.8 per cent. Outside of Asia and Eastern Europe, growth rates in most developing countries are too low to generate a marked reduction in poverty,'' it said.

"A sluggish global economic outlook, with slower growth in the next 12-18 months than previously anticipated, will impede poverty reduction in the developing countries,'' the report said.

PTI

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