A view of the Mumbai Stock Exchange, as India, South Asia’s largest economy, is forecast to grow 7.1% in 2026/27, up from an earlier projection of 6.6%. (EPA Images pic)

NEW DELHI: The World Bank raised its growth forecast for South Asia, citing resilient consumer demand despite an energy shock, but warned that persistently high oil prices, a severe weather shock and a global market correction could threaten the region's outlook.

The Bank now expects the region to grow 6.9% in 2026, 60 basis points (bps) higher than its previous forecast and 10 basis points above its estimate a year ago as "higher energy prices have not interrupted momentum in consumption growth."

"This is because government measures to shield consumers, strong remittances and resilient domestic demand have helped cushion the impact," World Bank Chief Asia Economist Franziska Ohnsorge said in an interview with Reuters on Monday.