SAsia regaining momentum: WB

KATHMANDU, APR 19 -

South Asia is regaining its economic momentum, but the recovery could falter in the absence of a stronger investment climate, said the World Bank (WB).

According to the WB’s South Asia Economic Focus report, the combined growth of Afgha-nistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka was just 4.7 percent in 2012, substantially below pre-crisis levels. A pick-up to 5.5 percent can be expected in 2013 with ongoing efforts to regain fiscal space and boost private investment. But given the uncertain global environment, it will be important to strengthen the investment climate, it said in a statement.

“How countries manage their economies in the face of uncertainties in the global environment will be critical not only for addressing near-term current account and fiscal deficits but also for tackling South Asia’s long-term challenges,” said Martin Rama, chief economist for the South Asia Region at the WB.

The report, a twice-yearly look at South Asia’s economic prospects, said that the region is now more vulnerable because current account balances have widened, foreign direct investment has slowed and persistently high inflation has limited the ability for central banks to use monetary policy to counter any economic downturn.

Source: The Kathmandu Post