Working with Industrial Policy

https://www.worldbank.org/en/region/sar/publication/south-asia-economic-update South Asia’s growth is expected to slow in 2026 amid headwinds from global energy market dislocation. Trade reforms could unlock further growth by reducing trade barriers, especially for emerging export sectors. Accelerating job creation is becoming harder as job prospects erode in AI-exposed activities, and subnational labor market disparities persist. South Asian countries make use of industrial policies at about twice the rate of other EMDEs. Since 2022, about half of South Asia’s industrial policies have been directed at manufacturing, particularly activities with more or better-paid employment. Cross-cutting measures to improve infrastructure, skills, and the business environment remain a priority to accelerate growth and job creation.