South Asia’s growth is expected to slow to 6.3% in 2026 from 7.0% in 2025, as the conflict in the Middle East and disruptions in global energy markets weigh on the import-dependent region, the World Bank said on Wednesday, as reported by Reuters. In its latest South Asia Economic Update, the bank said growth should recover to 6.9% in 2027, while the region would remain the fastest-growing among emerging market and developing economies. The bank added that the outlook is highly uncertain, as South Asia depends heavily on imported energy and is vulnerable to spillovers from the Middle East conflict. It warned that further energy market dislocations could raise inflation, force monetary tightening, and weaken remittance flows. India is expected to remain the main driver of regional growth, with output projected to grow by 7.6% in fiscal 2025/26 before easing to 6.6% in 2026/27. The bank had previously forecast growth for the current financial year at 6.3% in October 2025.