Publication: South Asia Economic Focus, Spring 2014 : Time to Refocus
Loading...
Date
2014-04-06
ISSN
Published
2014-04-06
Author(s)
Editor(s)
Abstract
South Asia experienced a strong cyclical rebound in 2013Q3 growth but has since slowed again. The strong regional growth performance between July and September 2013 can be largely attributed to a temporary pick up in export growth, investment activity, as well as stronger agricultural output. Since the large impact of global portfolio rebalancing in May 2103, emerging markets have separated into a diverse group ranging from continuously fragile to resilient vis-a-vis external pressures. India has managed to turn around the wheel and minimize exposure to further tapering in 2014. Weak growth and exchange rate depreciation have characterized India for some time. Capital inflows into South Asia have regained some momentum and proved more resilient in January 2014 as opposed to May 2013. This report presents recent economic developments; outlook and policy; focus: from external to domestic risk; South Asia country briefs for Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka; and South Asia at a glance.
Link to Data Set
Citation
“World Bank. 2014. South Asia Economic Focus, Spring 2014 : Time to Refocus. South Asia economic focus;. © http://hdl.handle.net/10986/17868 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Pakistan Development Update, April 2016(World Bank, Washington, DC, 2016-04)South Asia emerged as the fastest growing region in the world in 2015, posting GDP growth of 7 percent. Weak oil and commodity prices, slowing capital flows and shrinking global trade contributed towards a deceleration of growth in most of the world's economies. South Asia - as a net importer of oil - was an anomaly, growing significantly on the back of higher private consumption and public investment. Higher remittances and reserve buffers throughout the region offset the fall in exports caused by the drop in global demand. The region is set to maintain real GDP growth above 7 percent over the next few years. However, the tailwinds are now fading - capital flows have declined and remittances are starting to feel the reality of low oil prices. Pakistan, while not growing as quickly as its neighbors, has continued its steady growth recovery in H1FY16. Strong growth in consumption, rising foreign exchange reserves, fast-growing workers' remittances and a lower import bill compensated for a significant fall in exports. Low oil prices generated a significant boost, driving a 9.1 percent fall in the import bill and reducing inflation significantly, in turn creating scope to reduce the policy rate. Private sector consumption, propelled by higher remittances and a loosened monetary policy, is expected to account for over half of FY16 GDP growth.Publication Debt Management Performance Assessment : Albania(Washington, DC, 2011-06)From November 8 to 17, 2010, a World Bank team undertook a Debt Management Performance Assessment (DeMPA) mission to Tirana, Albania. The mission's objective was to prepare a comprehensive assessment of government debt management functions by applying the DeMPA methodology. This report presents the results of the assessment, based on the December 2009 version of the DeMPA tool. The assessment reveals that Albania meets the requirements for the A score in eleven dimensions assessed the B score in five dimensions, the C score in twelve dimensions, and the D score in five dimensions. Of more than 50 countries assessed by the World Bank under the DeMPA program so far, Albania stands out as one of the few which has sound debt management practices in the largest number of areas as defined by the DeMPA methodology. Albanian economy is highly dependent on remittances. Sectors that rely on remittances construction, wholesale and retail, and other services together account for over 60 percent of the country's Gross Domestic Product (GDP) and has been the backbone of the country's strong growth. Large capital inflows (remittances, official assistance, and some foreign direct investment) have resulted in a steady appreciation of the country's currency. The DeMPA focuses on central government debt management activities and closely-related functions, such as the issuance of loan guarantees, on-lending, cash flow forecasting, and cash balance management. Thus, the DeMPA does not assess the ability to manage the wider public debt portfolio, including implicit contingent liabilities.Publication Financial Globalization and the Russian Crisis of 1998(2010-05-01)Russia had more-or-less completed the privatization of its manufacturing and natural resource sectors by the end of 1997. And in February 1998, the annual inflation rate at last dipped into the single digits. Privatization should have helped with stronger micro-foundations for growth. The conquest of inflation should have cemented macroeconomic credibility, lowered real interest rates, and spurred investment. Instead, Russia suffered a massive public debt-exchange rate-banking crisis just six months later, in August 1998. In showing how this turn of events unfolded, the authors focus on the interaction among Russia's deteriorating fiscal fundamentals, its weak micro-foundations of growth and financial globalization. They argue that the expectation of a large official bailout in the final 10 weeks before the meltdown played an important role, with Russia's external debt increasing by $16 billion or 8 percent of post-crisis gross domestic product during this time. The lessons and insights extracted from the 1998 Russian crisis are of general applicability, oil and geopolitics notwithstanding. These include a discussion of when financial globalization might actually hurt and a cutoff in market access might actually help; circumstances in which an official bailout could backfire; and why financial engineering tends to fail when fiscal solvency problems are present.Publication Bangladesh Development Update, October 2014(World Bank, Washington, DC, 2014-10)Progress on reducing extreme poverty and boosting shared prosperity through human development and employment generation has continued. This needs to be further consolidated in the near-term by sustaining Gross Domestic Product (GDP) and remittances growth recovery, creating jobs, containing inflation, and making progress on improving the quality of service delivery in health and education. To sustain growth in the near- and medium-term, private investments need to increase significantly. At the same time, the quality of public investment needs to be substantially enhanced to alleviate the infrastructure constraints on private investments and to expand service delivery. Moving forward in the immediate future, stronger attention is needed to (a) swiftly complete the transition in the garment industry, (b) finish the critical ongoing road development projects, (c) enact the Public Private Partnership (PPP) law, and (d) award contracts to build Special Economic Zones (SEZs).Publication India Development Update, October 2013(Washington, DC, 2013-10)Although the recent market turmoil has been driven primarily by external factors, it has magnified India's macroeconomic vulnerabilities. India was just one of a large number of emerging market economies whose currency and capital account were adversely affected by a large outflow of portfolio investment this summer. The current downturn presents an opportunity to push ahead with critical reforms. The current situation is unlikely to place an insurmountable stress on the economy, but it does offer an opportunity for measures to strengthen the business environment, attract more Foreign Direct Investment (FDI), and increase productivity. The rupee depreciated sharply in May-August 2013, mainly caused by market fears of an early end to the Federal Reserve's stimulus program. As global investors shifted funds into US treasuries, the May-August fall in the rupee closely mirrored movements in other emerging market currencies and US T-bonds. The current account deficit moderated and exports performance improved. After reaching a record high of 6.5 percent of Gross Domestic Product (GDP) in the third quarter FY2013, the current account deficit improved to 3.6 percent of GDP in the fourth quarter. The decline in poverty has accelerated, but vulnerability remains high. Between 2005 and 2012, India lifted 137 million people out of poverty and reduced the poverty headcount (at the national poverty line) to 22 percent of the population. The depreciation in the rupee is unlikely to have major adverse effects and provides an opportunity to accelerate growth through further progress on the reform agenda. Financing of the gap is expected to come in roughly equal parts from FDI and institutional flows in FY2014, with a growing contribution from FDI in FY2015.
Users also downloaded
Showing related downloaded files
Publication South Asia Development Update, April 2024: Jobs for Resilience(Washington, DC: World Bank, 2024-04-02)South Asia is expected to continue to be the fastest-growing emerging market and developing economy (EMDE) region over the next two years. This is largely thanks to robust growth in India, but growth is also expected to pick up in most other South Asian economies. However, growth in the near-term is more reliant on the public sector than elsewhere, whereas private investment, in particular, continues to be weak. Efforts to rein in elevated debt, borrowing costs, and fiscal deficits may eventually weigh on growth and limit governments' ability to respond to increasingly frequent climate shocks. Yet, the provision of public goods is among the most effective strategies for climate adaptation. This is especially the case for households and farms, which tend to rely on shifting their efforts to non-agricultural jobs. These strategies are less effective forms of climate adaptation, in part because opportunities to move out of agriculture are limited by the region’s below-average employment ratios in the non-agricultural sector and for women. Because employment growth is falling short of working-age population growth, the region fails to fully capitalize on its demographic dividend. Vibrant, competitive firms are key to unlocking the demographic dividend, robust private investment, and workers’ ability to move out of agriculture. A range of policies could spur firm growth, including improved business climates and institutions, the removal of financial sector restrictions, and greater openness to trade and capital flows.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Europe and Central Asia Economic Update, Fall 2024: Better Education for Stronger Growth(Washington, DC: World Bank, 2024-10-17)Economic growth in Europe and Central Asia (ECA) is likely to moderate from 3.5 percent in 2023 to 3.3 percent this year. This is significantly weaker than the 4.1 percent average growth in 2000-19. Growth this year is driven by expansionary fiscal policies and strong private consumption. External demand is less favorable because of weak economic expansion in major trading partners, like the European Union. Growth is likely to slow further in 2025, mostly because of the easing of expansion in the Russian Federation and Turkiye. This Europe and Central Asia Economic Update calls for a major overhaul of education systems across the region, particularly higher education, to unleash the talent needed to reinvigorate growth and boost convergence with high-income countries. Universities in the region suffer from poor management, outdated curricula, and inadequate funding and infrastructure. A mismatch between graduates' skills and the skills employers are seeking leads to wasted potential and contributes to the region's brain drain. Reversing the decline in the quality of education will require prioritizing improvements in teacher training, updated curricula, and investment in educational infrastructure. In higher education, reforms are needed to consolidate university systems, integrate them with research centers, and provide reskilling opportunities for adult workers.Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.