ISLAMABAD (APP) - South Asia appears to have escaped the worst effects of the global economic crisis as the regions GDP growth of 6pc in 2009 remains unchanged from 2008, according to a recently released World Bank report, 'Global Economic Prospects 2010. The report cited that the global financial crisis contributed to deceleration in real GDP growth in South Asia, from 8.7pc in 2007 to 6pc in 2009. This was largely driven by a pronounced decline in investment growth and private consumption. Although the global financial crisis had a sharp negative impact on South Asia, the slowdown in regional GDP growth was the lowest among all developing regions. Since private capital inflows to South Asia is less significant as a share of its GDP as compared to other regions, the region escaped from a key transmission channel of the crisis. Also, domestic demand in the region was relatively resilient, having been cushioned by counter-cyclical macroeconomic policies. The report, however, forecast the growth to rebound to 6.9pc and 7.4pc in 2010 and 2011. Similarly, it warned that the global recovery is fragile and predicted that the fallout from the crisis will change the landscape for finance and growth over the next 10 years. From a global perspective, the report stated, this crisis is the most severe and widespread downturn since 1945. Global GDP is estimated to have contracted by 2.2pc in 2009 and is expected to grow 2.7pc this year and 3.2pc in 2011. The report also warned that even when the world return to positive growth, it will take several years before economies recoup the losses already endured. It estimates that about 64 million more people will be living in extreme poverty (on less than $1.25 a day) in 2010 because of this crisis. Specifically mentioning to South Asia, the report counted that lower oil prices have eased pressures on fiscal deficits stemming from fuel price subsidies. Real incomes were also boosted by the collapse in global commodity prices and domestic demand in region was relatively resilient, having been cushioned by countercyclical macroecon-omic policies. Moreover, interest rates were rapidly cut across most economies that represent a large share of regional household outlays. Bangladesh, India, Pakistan, and Sri Lanka cut policy interest rates and the activity in Bhutan and Nepal, where the currencies are tied to the Indian rupee, was supported by Indias expansionary monetary policy stance. In addition, the report noted, regional fiscal positions deteriorated in 2009 in response to a combination of reduced tax receipts resulting from the decline in economic activity though even before the crisis, fiscal deficits were a problem for many South Asian countries. While stimulus measures helped offset the negative effects of the global crisis, they led to higher fiscal deficits in nearly all of the regional economies. Though regional GDP growth has been projected to accelerate in the report, a return to boom-period growth rates is not expected in near future while regional fiscal deficit is projected to narrow on reversal of stimulus measures introduced to support demand during the crisis. According to this report, the recovery path for the individual economies will vary substantially and countries that entered the crisis with stronger fundamentals, such as Bangladesh, Bhutan, and India, whethered the crisis better and are expected to emerge from the global crisis with stronger growth performances. These three countries generally have sound economic policies and greater resilience of trade, investment, and remittances. However, the report counted that growth has been weakest in countries that entered the crisis with large internal and external imbalances, such as the Maldives, Pakistan, and Sri Lanka. Sri Lanka is also forecast to post a relatively firm recovery, supported by the recent surge in capital inflows following the cessation of fighting after nearly three decades of civil war. However, the conflict-affected countries - Afghanistan, Pakistan and Nepal-are expected to face more moderate growth outputs, as political uncertainty and fight against terrorism continue to effect economic activity.