South Asia Economic Focus, Fall 2017 : Growth Out of the Blue
For eight consecutive quarters South Asia was the fastest-growing region in the world… but not anymore. Despite benign global conditions, regional growth has slowed down. This trend is the result of a deceleration in India, the region’s powerhouse. Short-term disruptions related to the introduction...
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Washington, DC: World Bank
2017
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| Online Access: | http://hdl.handle.net/10986/28397 |
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okr-10986-283972021-04-23T14:04:48Z South Asia Economic Focus, Fall 2017 : Growth Out of the Blue World Bank ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE For eight consecutive quarters South Asia was the fastest-growing region in the world… but not anymore. Despite benign global conditions, regional growth has slowed down. This trend is the result of a deceleration in India, the region’s powerhouse. Short-term disruptions related to the introduction of the landmark Goods and Services Tax can explain the steep decline observed in the last quarter, but the deceleration has been going on for more than one year. Over this period imports increased sharply while private investment declined. Behind these trends lies a combination of large public sector borrowing (especially by the states), relatively sticky interest rates despite decreasing inflation, and an increasingly stressed financial sector. While growth has slightly accelerated elsewhere in the region, concerns remain. Bangladesh has seen an increase in financial sector risks and in Pakistan macroeconomic discipline has weakened. At 6.7 percent, growth is projected to remain strong in South Asia in 2017, albeit slightly lower than forecast in June. The growth rate is expected to stabilize around 7 percent over the medium term. Consumption should remain strong and private investment should regain momentum thanks to ongoing support from infrastructure development and economic reforms. Measuring GDP is especially challenging in developing countries, where the informal sector is large and institutional constraints can be severe. As a result, GDP growth estimates are often met with skepticism. But new technologies offer an opportunity to improve matters. Luminosity observed from satellites has been shown to be a good proxy for economic activity, and methodologies have been developed in recent years to predict GDP over time and across space based on nightlight intensity. In South Asia’s case, GDP predicted using these methodologies closely tracks National Accounts GDP at the aggregate level, and provides a granular picture of GDP at subnational levels. Nightlight intensity also yields new insights on recent economic developments. 2017-09-25T19:48:44Z 2017-09-25T19:48:44Z 2017-10-08 Serial 978-1-4648-1213-2 http://hdl.handle.net/10986/28397 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research Publications & Research :: Publication South Asia India |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE |
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ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE World Bank South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| geographic_facet |
South Asia India |
| description |
For eight consecutive quarters South Asia was the fastest-growing region in the world… but not
anymore. Despite benign global conditions, regional growth has slowed down. This trend is the result of a deceleration in India, the region’s powerhouse. Short-term disruptions related to the introduction of the landmark Goods and Services Tax can explain the steep decline observed in the last quarter, but the deceleration has been going on for more than one year. Over this period
imports increased sharply while private investment declined. Behind these trends lies a combination of large public sector borrowing (especially by the states), relatively sticky interest rates despite decreasing inflation, and an increasingly stressed financial sector. While growth
has slightly accelerated elsewhere in the region, concerns remain. Bangladesh has seen an increase in financial sector risks and in Pakistan macroeconomic discipline has weakened.
At 6.7 percent, growth is projected to remain strong in South Asia in 2017, albeit
slightly lower than forecast in June. The growth rate is expected to stabilize around 7 percent over the medium term. Consumption should remain strong and private investment should regain
momentum thanks to ongoing support from infrastructure development and economic reforms.
Measuring GDP is especially challenging in developing countries, where the informal sector is large and institutional constraints can be severe. As a result, GDP growth estimates are often met with skepticism. But new technologies offer an opportunity to improve matters. Luminosity observed from satellites has been shown to be a good proxy for economic activity, and methodologies have been developed in recent years to predict GDP over time and across space based on nightlight intensity. In South Asia’s case, GDP predicted using these methodologies closely tracks National Accounts GDP at the aggregate level, and provides a granular picture of GDP at subnational levels. Nightlight intensity also yields new insights on recent economic developments. |
| format |
Serial |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| title_short |
South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| title_full |
South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| title_fullStr |
South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| title_full_unstemmed |
South Asia Economic Focus, Fall 2017 : Growth Out of the Blue |
| title_sort |
south asia economic focus, fall 2017 : growth out of the blue |
| publisher |
Washington, DC: World Bank |
| publishDate |
2017 |
| url |
http://hdl.handle.net/10986/28397 |
| _version_ |
1764466809706119168 |