World Bank warns of slowing growth, rising poverty across region

Economic growth is decelerating across South and Southeast Asia, reversing years of expansion and pushing more people into poverty, according to a World Bank report released this week. The multilateral lender attributed the slowdown to global headwinds, including tighter monetary conditions and weaker external demand, which have constrained regional export-dependent economies.

The outlook is particularly troubling for lower-income households. Rising inflation, currency depreciation, and reduced employment opportunities have combined to erode purchasing power in several countries, the report noted. Policymakers face mounting pressure to balance fiscal constraints with the need to support vulnerable populations.

Beyond growth concerns, the World Bank flagged rising risks within the banking and financial sectors across the region. Asset quality deterioration, elevated non-performing loans, and refinancing pressures in some markets pose systemic risks that could amplify economic stress if left unaddressed. Regulators have been urged to strengthen supervision and ensure adequate capital buffers.

The report underscores the fragile nature of the region's current economic position. While some countries retain policy flexibility, others face constrained fiscal and monetary space, limiting their ability to respond to further shocks. Regional policymakers will need to pursue targeted reforms to restore growth momentum while protecting the most vulnerable segments of their populations.