Economic Growth and Public Investment

• Regional Growth Trends:

  • South Asia: Growth in South Asia is projected to moderate, with India expected to slow slightly but still lead regional economic performance. Forecasts suggest growth around 6.2% for 2024-2025, with Bangladesh and Pakistan maintaining stable if slower growth than pre-pandemic levels. Risks, however, loom with possible disruptions from geopolitical tensions, particularly if Middle Eastern conflicts intensify, and from climate events that affect infrastructure​ Home

    World Bank

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  • Sub-Saharan Africa: The region is projected to see a growth uptick, with expected gains in private consumption and investment bringing growth to around 3.5% in 2024. However, challenges remain due to political instability, debt-related fiscal limitations, and high inflation. The region's per capita income, though improving, remains insufficient for meaningful poverty reduction in the near term​

    World Bank

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• Investment in Public Infrastructure:

  • Public investment is crucial for catalyzing growth and improving productivity, especially in emerging market and developing economies (EMDEs). The World Bank points to a historical slowdown in investment growth post-2008, which could hinder development goals without renewed efforts. Strategic public investment—estimated to increase output by 1.6% over five years—can also attract private investments. For this to succeed, improved fiscal policies and administrative reforms are essential, especially in nations with limited fiscal resources​

    World Bank

    World Bank

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• Challenges in Small States:

  • Many small states continue to struggle with fiscal sustainability, exacerbated by climate-related disasters and limited revenue streams. Roughly 40% of small emerging market economies face high debt risks, often tied to dependence on volatile revenue sources. Policy recommendations focus on stabilizing revenue and bolstering climate-resilient infrastructure to improve fiscal sustainability in the face of increasing environmental challenges​

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