South Asia Economic Focus, Fall 2013 : A Wake-Up Call

Publication:
South Asia Economic Focus, Fall 2013 : A Wake-Up Call

dc.contributor.author	World Bank
dc.date.accessioned	2013-10-10T16:52:43Z
dc.date.available	2013-10-10T16:52:43Z
dc.date.issued	2013-10-10
dc.description.abstract	Global capital re-balancing has highlighted structural weakness and vulnerability in South Asia, acting as a wake-up call for policy makers. While recent economic developments in advanced countries are encouraging, large parts of the region continue to slow. Portfolio outflows, triggered by the prospect of unwinding Quantitative Easing (QE) in the US, have made current account deficits more difficult to finance across emerging markets. Meanwhile, supply-side constraints and macroeconomic imbalances remain a challenge in most South Asian countries. But the depreciation of regional currencies offers an opportunity to stimulate growth and create space for reforms to improve the investment climate. While the medium term outlook for the region remains cautiously positive, two highly complementary policies are central for needed higher and sustainable growth. First, continuing to tighten the stance of fiscal and monetary policy will help to promote macroeconomic stability and raise tax revenue to reduce vulnerability. Second, removing supply side constraints, both regulatory and physical, will pave the way for increasing investment and growth. Given the recent economic turmoil across emerging market economies, this edition's focus section examines the relationship between the transmission of economic shocks from India to the rest of South Asia, as well as from the world to South Asia. The main findings of the analysis suggest that, independent of global business cycle movements, India plays an important role in influencing growth across the region, and that this effect has increased since the 2008 global crisis. Furthermore, the United States played a larger role in influencing global cyclical real GDP movements before the global crisis, but since then its independent influence has diminished as all regions are moving together with greater frequency. Nonetheless, much of the cyclical real GDP variation in the region remains idiosyncratic.	en
dc.identifier.doi	10.1596/978-1-4648-0118-1
dc.identifier.isbn	978-1-4648-0118-1
dc.identifier.uri	https://hdl.handle.net/10986/16108
dc.language.iso	en_US
dc.publisher	Washington, DC
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo/
dc.subject	economic growth
dc.subject	economic indicators
dc.subject	economic policy
dc.subject	economic risks
dc.subject	foreign direct investment
dc.subject	investment
dc.subject	macroeconomic developments
dc.subject	macroeconomic outlook
dc.title	South Asia Economic Focus, Fall 2013 : A Wake-Up Call	en
dspace.entity.type	Publication
okr.date.disclosure	2013-10-10
okr.doctype	Publications & Research::Publication
okr.globalpractice	Macroeconomics and Fiscal Management
okr.globalpractice	Trade and Competitiveness
okr.guid	324271468113957346
okr.language.supported	en
okr.region.administrative	South Asia
okr.region.country	Afghanistan
okr.region.country	Bangladesh
okr.region.country	Bhutan
okr.region.country	India
okr.region.country	Maldives
okr.region.country	Nepal
okr.region.country	Pakistan
okr.region.country	Sri Lanka
okr.region.geographical	South Asia
okr.sector	Public Administration, Law, and Justice :: Public administration- Finance
okr.sector	Finance :: Capital markets
okr.sector	Finance :: General finance sector
okr.sector	Industry and trade :: Other domestic and international trade
okr.theme	Economic management :: Analysis of economic growth
okr.theme	Economic management :: Macroeconomic management
okr.theme	Financial and private sector development :: Other financial and private sector development
okr.theme	Trade and integration :: Other trade and integration
okr.topic	International Economics and Trade
okr.topic	Macroeconomics and Economic Growth
okr.unit	Office of the Chief Economist for the South Asia Region