Kathmandu, April 8
All countries of South Asia needs to increase export so as to sustain the region’s high growth and reach its full economic potential, says the World Bank.
In its half yearly regional economic update, the Bank finds that the region’s growth, while still robust, is mainly driven by domestic demand, which in turn swelled imports and far outstripped exports, further widening trade gaps and current account deficits, and triggering currency depreciation in some countries.
The update titled Exports Wanted observes that imports grew much stronger than exports in the last two years across the region, reversing the region’s exports dynamics of the early 2000s.
Likewise, it says strong domestic demand, fuelled by a consumption and investment boom, resulted in high import growth of 14.9 percent in 2017 and 15.6 percent in 2018, which is nearly twice as high as the region’s export growth. In comparison, exports grew by only 4.6 percent in 2017 and 9.7 percent in 2018.
Hartwig Schafer, World Bank Vice President for the South Asia Region, says, “To ensure growth in the long run, the region needs to integrate further into international markets to sustain its upward growth trajectory, create more jobs, and boost prosperity for its people.”
