World Bank South Asia Development Update April 2025
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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BEFORE: Regional growth was previously buoyed by robust post-pandemic recovery spending. NOW: Regional growth is projected to slow to 5.8 percent in 2025 as base effects wear off and external headwinds increase.
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BEFORE: Fiscal policies in South Asia heavily utilized debt-funded subsidies to shield populations from global inflation shocks. NOW: The policy focus has shifted strictly to domestic revenue mobilization and eliminating tax loopholes to build fiscal buffers.
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BEFORE: India's growth projections for the preceding fiscal years consistently hovered around 7 percent or higher. NOW: The World Bank moderated India's FY25/26 growth forecast to 6.3 percent, urging structural fiscal reforms.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding fiscal policy and the World Bank's April 2025 South Asia Development Update? 1. The report urged South Asian economies to eliminate tax loopholes to improve domestic revenue mobilization. 2. A low tax-to-GDP ratio restricts a government's ability to implement countercyclical fiscal policy during economic downturns.