SATV Kathmandu Oct 07: The World Bank cut its forecast for South Asia’s economic growth by nearly a percentage point, as punishing US tariffs on India — the region’s largest economy — weigh on the outlook.

In its Tuesday report, the Washington-based institution projected South Asia’s growth to ease to 5.8% in 2026, down from 6.6% this year, a sharper slowdown than previously anticipated.

The projection for 2026 is the region’s lowest in 25 years, excluding periods of global recession or economic downturns, the lender said.

“South Asia has enormous economic potential and is still the fastest growing region in the world. But countries need to proactively address risks to growth,” said Johannes Zutt, World Bank vice president for South Asia, in a statement.