New Delhi: Higher GDP growth prospects in India is likely to push up the overall prospects of the recession-hit South Asian region to about 5.0 per cent growth this year, the World Bank said on March 13.

"GDP in South Asian region increased by 4.3 per cent in 2001, up from four per cent growth in 2000. The region is expected to recover modestly this year with an average growth rate of 4.9 per cent, and thereafter remain at a rate around 5.3 per cent," the bank said in its latest 'Global Development Finance' report.

According to the report, global economic slowdown was exceptionally deep and broad, as the deceleration in growth rates has been equally rapid for both rich and developing countries.

Distribution of FDI in South Asia region was almost proportional to GDP with 75 per cent going to India and around 10 per cent going to Pakistan and Bangladesh.

FDI in India increased by a full one billion Dollar in the year to reach 3.3 billion Dollar.

However, the report pointed that despite a 35 per cent rise in foreign direct investment (FDI) to the region at $4.2 billion in 2001 from a year ago period, FDI in the region was small, only a 0.5 per cent of GDP.

Low FDI flow into the region reflects "little progress in privatisation, glacial industrial regulations and slow reforms in the labour market", it said.

PTI