Economic Buzz: World Bank raises its 2026 South Asia growth forecast to 6.9% from 6.3%

World Bank raised its 2026 South Asia growth forecast to 6.9% from 6.3%, while lowering the forecast for the region excluding India to 3.6% from 4.1%. Higher energy prices and El Ni?o remain key risks to the outlook. Exceeding earlier projections, growth in South Asia is expected to increase to 6.9% this year, with strong domestic demand keeping the region resilient to global shocks, according to the World Bank Group?s twice-yearly regional outlook. Released today, the World Bank?s latest South Asia Economic Update, Adopting AI for Growth, says the strong growth is supported by robust domestic demand following strong remittance inflows and recent structural reforms. The report projects growth to slow to 6.7% in 2027 as headwinds mount. Persistently elevated energy prices could push inflation higher and tighten financial conditions, while a severe El Ni?o episode could affect agricultural output and food security, and a sharp reversal in global artificial intelligence (AI) investment could trigger financial strains.

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