The Pandemic and Economic Fallout in South Asia

Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia, which is rapidly becoming the next COVID-19 global hotspot. Challenges and policies relating to macroeconomics, health, economic sectors, stimulus measures, and reforms, which are all crucial for the region’s recovery are discussed.

This article is an outcome of joint research undertaken by South Asian think tanks. An earlier version of the article was discussed at the webinar “COVID-19: South Asia’s Response,” 2 May 2020. The authors are grateful to Sabya Dutta, Director, Asian Confluence for organising the webinar, and to the participants for their useful comments. The views are authors’ own.

South Asia, the world’s most populous region, is rapidly becoming the next global hotspot for the COVID-19 pandemic. Governments across the region are faced with the grim calculus of trading off health for the economy which is in lockdown or partial lockdown. Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia.

South Asia faces two major challenges at this juncture. First, is to tackle the public health emergency related to the spread of coronavirus (COVID-19). Saving lives and not overburdening under-developed health systems are important concerns of governments. Second, is to save the regional economy from an economic downturn and deep recession due to the effects of the Covid-19 pandemic and the global and regional lockdown.