Asian Development Bank on Wednesday projected a seven percent collective growth for South Asian economies in 2022 with the subregion's largest economy India growing by 7.5 percent in the current fiscal year before picking up to eight percent the next year.

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Releasing its flagship Asian Development Outlook (ADO) 2022, the Manila-based multi-lateral funding agency said the growth in South Asia is projected to slow to seven percent in 2022, before picking up to 7.4 percent in 2023.

The subregion's growth dynamics are largely driven by India and Pakistan. "South Asian economies are expected to expand collectively by seven percent in 2022 and 7.4 percent in 2023, with India -- the sub-regions largest economy -- expected to grow by 7.5 percent this fiscal year (FY23) and eight percent next fiscal year (FY24)," the agency's ADO report said.

Pakistan's growth is forecast to moderate to four percent in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5 percent in 2023, it said.

ADB said developing Asia's economies are predicted to grow by 5.2 percent this year and 5.3 percent in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports.

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"However, uncertainties stemming from the Russian invasion of Ukraine, the continuing coronavirus disease (COVID-19) pandemic, and tightening by the United States Federal Reserve pose risks to the outlook," ADB Outlook said.

Developing Asia comprises 46 member countries of ADB by geographic group: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.

South Asia comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. "Economies in developing Asia are starting to find their footing as they slowly emerge from the worst of the COVID-19 pandemic," said ADB Chief Economist Albert Park. However, geopolitical uncertainty and new COVID-19 outbreaks and virus variants could derail this momentum.

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"Governments in the region will need to remain vigilant and prepared to take steps to counter these risks. That includes making sure as many people as possible are fully vaccinated against COVID-19. Monetary authorities should also continue to monitor their inflation situation closely and not fall behind the curve," Park said.