Demographic dividend: India’s employment ratio rebounds, leads other South Asia countries

Posted by

New Delhi: The World Bank in its South Asia Development Update forecast India’s GDP to grow at 7.5 per cent in 2024, driving up the regional growth figure to 6 per cent in 2024. However, the World Bank warned that demographic dividend, a key growth driver was not being adequately utilised in South Asia. Measured using the employment ratio, demographic dividend can lead add up to 16 per cent to the growth forecast of South Asian countries, said the World Bank. Employment ratio measures employment generation against rise in working age population.

India’s employment ratio compared to South Asian neighours

The World Bank stated that South Asian economies are likely to benefit more by capitalising on demographic dividend. South Asia’s output may jump 16 per cent higher provided that a larger share of the working-age population was employed, said Franziska Ohnsorge, World Bank Chief Economist for South Asia.

The World Bank measured this metric using the employment ratio, which compares employment growth with average working-age population growth.

Citing data, the World Bank stated that during 2000-23 employment ratio declined 2 per cent compared to other emerging market and developing economies (EMDEs).

As of 2023, South Asia’s employment ratio stood at 59 per cent compared to 70 per cent for other EMDEs.
Nepal, Maldives, Pakistan and Sri Lanka form the lowest quartile of employment ratio among EMDEs, according to the report.
India witnessed a strong rebound in employment growth in 2023 by 3 basis points.
Maldives witnessed a 2 per cent decline in employment ratio during 2000-23.
Nepal’s employment ratio fell 11 per cent in 2000-23.
Sri Lanka’s employment ratio decline was the steepest in South Asia.
Bhutan’s employment ratio declined 5 per cent during 2000-23.

South Asian growth warning

Sounding a positive note on near-term growth outlook, the World Bank tempered its commentary with a warning about “dark clouds” related to fragile fiscal positions and elevated climate shocks.

India has done the heavy lifting for the South Asian region by accounting for the bulk of the region’s economy, according to the report. India’s output growth is expected to peak to 7.5 per cent in FY24 before gradually moderating to 6.6 per cent in the medium term. India’s services and industrial sectors are expected to witness robust growth.

Bangladesh is witnessing an economic recovery with growth expected to touch 5.7 per cent in FY24-25. However, the world’s garment factory is expected to struggle with inflation and trade restrictions apart from a constraint on its foreign exchange. Pakistan is forecast to witness an economic recovery, with the World Bank pegging its GDP at 2.3 per cent in FY24/25.

Click to rate this post!
[Total: 0 Average: 0]

Leave a Reply

Your email address will not be published. Required fields are marked *