World Bank cuts South Asia's growth forecast for 2026
The World Bank now expects South Asia's economy to grow by 5.8% in 2026, down from 6.6% this year (2025).
The main reasons? Global economic ups and downs, jobs changing fast because of AI, and social unrest across the region.
US tariffs on Indian exports are making things tougher—especially for industries like textiles and jewelry.
India and Nepal are set to see the biggest drops
India's growth is set to slow to 6.3% in the next fiscal year (ending March 2026), with over three-quarters of its US exports hit by tariffs.
Nepal could see growth drop to just 2.1% due to ongoing unrest, while Bangladesh is hoping for a bounce back to 6.3% as politics calm down.
Sri Lanka is catching a break thanks to tourism and money sent home from abroad.
What can countries do to help?
To help turn things around, the World Bank says South Asian countries should lower trade barriers and help workers adapt as AI changes jobs and trade shifts happen.
Cutting tariffs and strengthening safety nets could encourage more private investment and create new jobs—especially in manufacturing and trade-related fields.