China is projected to grow by 7 percent in 2015 and 6.8 percent next year. The report termed South Asia's economic outlook as "largely favourable" as most economies are expected to experience a strong growth in 2015-16, thanks to robust domestic consumption and investment and a rise in exports.

South Asia's Gross Domestic Product is also predicted to grow by 6.7 percent in 2015 and 6.9 percent in 2016, which is more than the estimated 6.3 percent in 2014. Average inflation in the region is also projected to fall to its lowest level in almost a decade, following the recent decline in oil and food prices. As a result, monetary policy has become more expansionary in several countries, notably in India and Pakistan, it said.

However, despite the improved outlook, South Asia's economies face, to varying degrees, long-standing development challenges including energy shortages, infrastructure deficits and political and social unrest. The global economy will continue to grow at a modest pace.

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