South Asia’s economy is expected to grow 6.9% in 2026, stronger than the World Bank’s earlier projection, as robust domestic demand, remittance inflows and recent structural reforms support activity. The region remains among the world’s fastest-growing.

The bank’s October South Asia Economic Update projects growth easing to 6.7% in 2027 as risks build. Persistently high energy prices could increase inflation and tighten financial conditions, while a severe El Niño episode could hurt agriculture and food security. A sharp reversal in global artificial-intelligence investment could also produce financial stress.

The report argues that wider, carefully managed adoption of artificial intelligence could raise productivity and help create jobs, but sustaining growth will require investment in new economic drivers and resilience.

Sources: [World Bank — South Asia’s Strong Growth Defies Global Headwinds](worldbank.org source ↗) and [World Bank — India Development Update](worldbank.org source ↗).