The World Bank projects South Asian growth of 6.9 per cent this year and 6.7 per cent next year as domestic demand proves stronger than earlier forecasts. Remittances and structural reforms support the outlook, but persistent energy costs and weather shocks remain risks. The regional update also describes uneven adoption of artificial intelligence and opportunities to adapt smaller applications to local businesses and public services.
Economics & Markets··Evening
Domestic demand supports the stronger growth outlook
The World Bank projects growth in South Asia of 6.9 per cent this year and 6.7 per cent next year in its October regional update.[1], [2]
Domestic demand has exceeded the bank’s earlier projections, with robust remittance inflows and recent structural reforms among the supports. Persistent high energy prices could raise inflation and tighten financial conditions. A severe El Niño weather episode could affect agricultural production and food security; a sharp reversal in global artificial-intelligence investment is another financial risk identified by the bank.[1]
AI adoption differs sharply between firms
Approximately 23 per cent of Indian firms report using artificial intelligence, compared with 43 per cent in the United States. The World Bank finds a wider gap for more sophisticated applications. It identifies opportunities for South Asian suppliers in AI-intensive global value chains, alongside shortages of skilled staff in health, education and agriculture.[1]
Small applications are being adapted to local services
Examples include weather forecasts delivered to smallholder farmers in India and retinal screening in Bangladesh. The report describes small applications designed for basic devices and limited connectivity. The bank recommends stronger workforce skills, physical and digital infrastructure, fewer adoption barriers for small businesses, support for local innovation, and regulation protecting data security and privacy.[1]
