报告：迈向更快、更清洁的增长（英）-152页_2mb

South Asia Development Update: Toward Faster, Cleaner Growth (October 2023)

Core Content

This report provides an analysis of the current economic and development landscape in South Asia, focusing on growth, fiscal sustainability, the energy transition, and labor market impacts. It highlights the region's progress and challenges in achieving faster, cleaner, and more sustainable development.

Main Findings

Regional Outlook: Solid Progress, But a Long Way to Go

• Growth Prospects: South Asia is expected to grow at just under 6% in 2024–25, the fastest among emerging market and developing economy (EMDE) regions.
• Slower Growth: Despite this, growth is expected to be lower than pre-pandemic averages, with some countries recovering from recent balance-of-payments crises.
• Challenges: The region faces risks from fragile fiscal positions, weak financial systems, and potential external shocks such as a further slowdown in China or climate-related disasters.
• Policy Priorities: In the short term, maintaining financial stability and improving fiscal sustainability are critical. In the long term, boosting private investment, increasing trade openness, and leveraging the global energy transition are essential.

Fiscal Deteriorations Around Elections

• Fiscal Trends: In EMDEs, primary fiscal deficits, government expenditures, and wage bills tend to rise significantly around election years.
• South Asia Specifics: Fiscal positions in South Asia have deteriorated around national elections, with some evidence of targeted fiscal actions around subnational elections.
• Policy Implication: Fiscally constrained governments should avoid election-induced spending increases and focus on sustainable fiscal management.

Sovereign Debt Default

• High Debt Levels: South Asia has the highest average government debt-to-GDP ratio among EMDE regions (86% in 2022).
• Default Risks: Four countries are rated in or near sovereign debt distress. Defaults often occur during monetary tightening cycles and in countries with above-median debt-to-GDP ratios.
• Outcomes of Defaults: Successful defaults are often accompanied by debt restructuring, growth acceleration, and fiscal consolidation.
• Recommendation: Governments should adopt policies to reduce default risks and ensure sustainable growth.

Energy Transition

• Energy Intensity: South Asian economies are almost twice as energy-intensive as the global average.
• Technology Adoption: While basic energy-saving technologies are adopted, advanced technologies are lagging, especially among small firms.
• Opportunities: The energy transition offers a chance to increase productivity, reduce pollution, and create jobs.
• Policy Measures: Market-based regulations, information campaigns, financial support, and reliable power grids are key to accelerating the energy transition.

Labor Market Impacts of the Energy Transition

• Job Shifts: The transition from fossil fuels to sustainable energy will lead to significant labor market changes.
• Stranded Workers: Pollution-intensive jobs are more common and tend to be held by lower-skilled, informal workers. Green jobs are held by higher-skilled, better-paid, and formal-sector workers.
• Sectoral Shifts: In most countries, pollution-intensive jobs outnumber green jobs, with the exception of India.
• Policy Needs: A range of policies is required to support labor market adjustments, including education and training, labor mobility measures, and strengthening social safety nets.

Key Information

• Region: South Asia includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
• Data Cutoff: The data used in this report was cut off on September 25, 2023.
• Report Authors: The report was produced by the Office of the Chief Economist for the South Asia Region (SARCE), with contributions from various experts and institutions.
• License: This work is available under the Creative Commons Attribution 3.0 IGO license.

Policy Challenges and Recommendations

• Strengthening Investment: Improving infrastructure, the institutional and business environment, and the financial system's ability to provide credit are important for boosting private investment.
• Fiscal Sustainability: Increasing revenues, improving spending efficiency, and implementing stronger fiscal rules are necessary to reduce fiscal risks.
• Energy Transition: Accelerating the adoption of advanced energy-efficient technologies and promoting sustainable energy sources is crucial.
• Labor Market Adjustments: Ensuring job creation and worker mobility through education, training, and social safety nets is vital to support the transition.

Conclusion

South Asia is on a path of solid but slow progress toward sustainable development. While the region is expected to grow faster than other EMDE regions, the pace is still insufficient for reaching high-income status within a generation. The energy transition presents both opportunities and challenges, particularly for labor markets. Effective policy measures are needed to ensure fiscal sustainability, boost private investment, and support workers through the transition to cleaner energy sources.