South Asia is one of the fastest-growing regions in the world. According to the World Economic Situation and Prospects 2025, the region is projected to grow at an average of 5.7% in 2025 and 6% in 2026. This region comprises eight countries, including India, Bangladesh, Pakistan, Sri Lanka, Nepal, Bhutan, Afghanistan, and the Maldives. India has been one of the largest economies in the region, which is projected to grow at around 6.6% in 2025, much higher than China’s projected growth of 4.8% for the same year.
Additionally, Bangladesh, Nepal, and Bhutan are also making significant contributions to the region’s overall growth rate. Some nations, like Pakistan and Iran, are projected to achieve the lowest growth rates in the region due to economic and political difficulties.
GDP Growth Rates of South Asian Economies
The following table presents the GDP growth trends of the South Asian economies.
| Country | 2002–2016a | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024b | 2025c | 2026c |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 🇸🇦 South Asia | 6.2 | 6.5 | 5.3 | 3.2 | -1.6 | 5.5 | 6.4 | 6.5 | 5.9 | 5.7 | 6 |
| 🇦🇫 Afghanistan | 9.3 | 2.6 | 1.2 | 3.9 | -2.1 | -20.7 | -6.2 | 2.7 | .. | .. | .. |
| 🇧🇩 Bangladesh | 7.3 | 6.6 | 7.3 | 7.9 | 3.4 | 6.9 | 7.1 | 5.8 | 5.3 | 4.2 | 5 |
| 🇧🇹 Bhutan | 7.6 | 2.1 | 3.5 | 5.8 | -10.2 | 4.4 | 5.2 | 4.9 | 5 | 5.2 | 5.5 |
| 🇮🇳 India | 6.9 | 6.8 | 6.5 | 3.9 | -5.8 | 9.7 | 7 | 8.2 | 6.8 | 6.6 | 6.8 |
| 🇮🇷 Iran (Islamic Republic of) | 4 | 2.8 | -1.8 | -3.1 | 3.3 | 4.7 | 3.8 | 4.7 | 3.8 | 3.2 | 3.3 |
| 🇲🇻 Maldives | 5.7 | 7.1 | 8.7 | 7.3 | -32.9 | 37.5 | 13.8 | 4.7 | 5.1 | 4.6 | 4.5 |
| 🇳🇵 Nepal | 4.7 | 9 | 7.6 | 6.7 | -2.4 | 4.8 | 5.6 | 2 | 3.7 | 4.4 | 5.2 |
| 🇵🇰 Pakistan | 4.6 | 4.4 | 6.2 | 2.5 | -1.3 | 6.5 | 4.8 | 0 | 2.6 | 3.4 | 4.2 |
| 🇱🇰 Sri Lanka | 6.3 | 6.5 | 2.3 | -0.2 | -4.6 | 4.2 | -7.3 | -2.3 | 4.6 | 4 | 3.8 |
The data is sourced from the World Economic Situation and Prospects 2025.
In the table:
a represents the Average percentage change.
b represents the Partly estimated.
c represents Baseline scenario forecasts.
🇮🇳 India
India is the fifth largest economy globally and the largest in South Asia. It continues to be the region’s fastest-growing economy. The country maintained an average growth rate of around 6.9% from 2002 to 2016. Even after the major decline in 2020 with a negative GDP growth rate of -5.8% due to the pandemic, India recovered quickly with a 9.7% growth rate in 2021.
India’s GDP is expected to grow by 6.6% in 2025 and 6.8% in 2026. This strong growth shows India’s steady and consistent economic performance in the region over the years.
🇧🇩 Bangladesh
Bangladesh is another strong economy in the region. It had an impressive 7.3% average growth from 2002 to 2016, which continued in later years. Even in 2020, when many economies in South Asia and globally declined due to the pandemic, Bangladesh still managed a positive growth rate of 3.4%. Between 2017 and 2024, the country achieved the highest growth rate of 7.9% in 2019. While the country’s growth is expected to slow to 4.2% in 2025, it remains a stable economy. Compared to India, Bangladesh has shown more consistent growth, especially before the pandemic.
India and ASEAN Economies Projected Per-Capita GDP Growth
🇵🇰 Pakistan
Pakistan’s economy is struggling with high inflation, political instability, and mounting debt. All these factors negatively affected its growth trajectory among South Asian nations. During the pandemic, the country’s economy faced a negative growth rate of -1.3%, followed by a high growth of 6.5%. However, its GDP growth remained highly volatile, dropping to 0% in 2023. Additionally, the country’s economy is expected to recover slightly in 2025 at 3.4%, but it still lags behind other South Asian countries in long-term performance. Compared to India and Bangladesh, Pakistan’s growth has been lower and less stable.
🇱🇰 Sri Lanka
Sri Lanka has faced major economic challenges in recent years. The country experienced one of the strongest growths in the early 2000s, but since 2018, its economy has been on a declining trend. Additionally, it faced negative growth in 2019 and was hit hard with a major decline of -7.3% in 2022. The country’s economy is expected to recover with 4.0% growth in 2025; however, it still faces serious financial crises. Compared to Bangladesh and India, Sri Lanka’s economic performance has been weaker, mainly due to debt and economic mismanagement.
🇳🇵 Nepal
Nepal has had steady but moderate growth over the years. The country achieved an average growth of 4.7% between 2002 and 2016. Additionally, it recorded an impressive 9.0% growth in 2017, one of the highest in the region. However, its growth slowed down in 2023 to just 2%. In 2025, the country is expected to achieve a 4.4% growth rate. While Nepal’s economy is not as strong as India’s or Bangladesh’s, it remains stable compared to crisis-hit nations like Sri Lanka or Pakistan.
🇲🇻 Maldives
The Maldives remains a highly volatile economy in the region, which has shown extreme fluctuations in its economic growth. In 2020, it suffered a massive decline of -32.9%, the worst in the region. However, it rebounded with a record-breaking 37.5% growth in 2021. Such huge fluctuations in the country’s growth are due to its reliance on tourism, which was hit hard during the pandemic. Additionally, the country’s future growth looks stable at around 4.6% in 2025. Compared to India and Bangladesh, its long-term stability is weaker, but short-term growth can be very high.
🇧🇹 Bhutan
Bhutan’s economy is relatively small but stable. The country achieved 7.6% average growth between 2002 and 2016. It faced a major decline of -10.2% in 2020 due to the COVID-19 pandemic but quickly recovered with moderate growth in the following years. Additionally, the country is projected to achieve around 5.2% growth in 2025 and 5.5% in 2016. While Bhutan’s economy is not as strong as India’s or Bangladesh’s, it has remained more economically stable than Pakistan or Sri Lanka.
🇦🇫 Afghanistan
Afghanistan has faced severe economic challenges. The country recorded a shocking -20.7% decline in growth in 2021, followed by -6.2% in 2022. The country’s economic growth projection for 2025 and 2026 is not available according to the UN World Economic Situation and Prospects 2025.
Conclusion
South Asia’s economy is projected to grow by an average of 5.7% in 2025 and 6% in 2026. India remains the largest economy in the region, with a strong history of economic growth and stable projected growth in the future. Bangladesh is also a key economy in South Asia, with steady economic progress. Additionally, Nepal, Bhutan, and Maldevies have maintained moderate growth rates in the region. Pakistan and Sri Lanka have been struggling with political instability and inflation, which have badly impacted their growth rates.
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