South Asia’s Economic Growth Surpasses Expectations, Enhanced Female Workforce Participation Essential for Further Growth

Washington: South Asia’s economic growth is set to reach 6.4 percent this year, surpassing previous projections and maintaining its status as the world’s fastest-growing region. However, to harness its full economic potential and accelerate development, the region must increase women’s participation in the labor force and open further to global trade and investment.

According to The World Bank, the “South Asia Development Update: Women, Jobs, and Growth” highlights a broad-based upturn throughout the region, driven by strong domestic demand in India and swift recoveries in other South Asian countries. The report projects consistent growth, expecting the regional economy to grow at 6.2 percent annually over the next two years. Yet, the region faces several challenges, including extreme weather, debt distress, and potential social unrest, which could dampen economic prospects.

Martin Raiser, World Bank Vice President for South Asia, emphasized the need for key policy reforms to integrate more women into the workforce and remove barriers to global investment and trade to accelerate growth. The report notes that increasing female labor force participation rates to those of men could boost regional GDP by up to 51 percent.

The World Bank also pointed out that female labor force participation in South Asia is significantly lower than global averages, with only 32 percent of working-age women engaged in 2023, compared to 77 percent of men. The report suggests that social norms, legal restrictions, and logistical barriers like childcare and safe transport are significant hurdles to female employment.

Franziska Ohnsorge, World Bank Chief Economist for South Asia, called for a multi-pronged effort to increase women’s employment, recommending legal reforms, job creation measures, and improved access to safe transport and quality childcare. The report also stresses the importance of trade openness, linking it to increased female employment and suggesting that greater export orientation could simultaneously spur growth and create jobs, particularly for women.

The economic outlook for countries in the region varies, with most showing improvements except Bangladesh and Maldives, where challenges like recent floods and debt repayments could inhibit growth. India’s economy is projected to grow by 7.0 percent, fueled by strong agricultural output and consumer spending, while Sri Lanka and Pakistan also show signs of recovery contingent on continued reforms and policy measures.

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