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The World Bank believes that the economic growth rate of South Asian countries will also be affected amid the uncertainty seen in the current world economy. According to the 'South Asia Development Update, Taxing Times' report published by the bank on Wednesday, the regional growth rate will be 5.8 percent in 2025.
This is 0.4 percentage points lower than the previous October projection. However, the economic growth rate of South Asian countries is estimated to reach 6.1 percent in 2026.
Bhutan's economic growth rate is projected to be the highest among South Asian countries. In the financial year 2025/26 there is expected to be a growth rate of 7.6 percent . It is mentioned in the report that the construction of hydropower projects will support this growth. In Bhutan, the growth rate for the current year 2024/25 has dropped to 6.6 percent.
According to the World Bank report, the economic growth rate of Nepal will be limited to 4.5 percent in 2025. It is mentioned that there has been pressure on the growth due to the damage to the infrastructure caused by the severe floods and landslides that occurred in the country towards the end of 2024 . In 2026, the growth rate is projected to reach 5.2 percent.
India's growth rate of 6.5 percent in 2024/25 is estimated to slow down to 6.3 percent in 2025/26. The growth rate is estimated to be 5.7 percent in 2025 when the construction of the new airport terminal in the Maldives is completed. The economic growth rate in Pakistan is 2.7 percent in the year 2024/25, and the growth rate is estimated to be 3.1 percent in the year 2025/26.
Sri Lanka's growth rate is estimated to reach 3.5 in 2015 and return to 3.1 in 2026 as foreign investment and demand pick up again as the government restructures its debt. In Afghanistan, as foreign aid decreases, the economy will grow by only 2.5 percent in the year 2024/25 and the growth rate will decrease further to only 2.2 percent in the year 2025/26, according to the World Bank study.
"Amid the growing uncertainty in the world economy, the economic growth potential of South Asian countries is also weakening," the statement said, "This region can increase internal revenue mobilization, improve the weak financial position and face future obstacles." The
report recommended various policies for improving tax revenue recognition. These include reducing various exemptions, simplifying and unifying the tax system, tightening enforcement and making tax payments easier.
