South Asia

In South Asia, the pandemic interrupted a long period of economic growth. Early dire predictions about its impact, however, were proved wrong. Lockdowns and other preventive measures were initiated early in all countries, and may have been a bigger shock to the region’s economy than the pandemic itself. Subsequent policies prioritized social protection, support to agriculture, and food price stability. Scaling up agriculture and social protection programs accounted for more than 15 percent of the total pandemic-response budget in the region. In Bangladesh, India, and Pakistan, rapid expansion of social protection programs was facilitated by previous investments in the relevant institutions and infrastructure. Recent surveys suggest that public transfer systems for food security, health, and nutrition have worked well in the region’s large countries. However, the pandemic highlighted vulnerabilities in South Asian labor markets, especially for domestic migrant workers and in the nonfarm and informal sectors, which were decimated by the strict lockdowns. South Asia’s international remittance inflows also proved vulnerable. Increasing growth in the nonfarm and service sectors will be essential for continued economic and food system transformation.