South Asia experienced a strong cyclicalrebound in 2013Q3 growth but has since slowed again. Thestrong regional growth performance between July andSeptember 2013 can be largely attributed to a temporary pickup in export growth, investment activity, as well asstronger agricultural output. Since the large impact ofglobal portfolio rebalancing in May 2103, emerging marketshave separated into a diverse group ranging fromcontinuously fragile to resilient vis-a-vis externalpressures. India has managed to turn around the wheel andminimize exposure to further tapering in 2014. Weak growthand exchange rate depreciation have characterized India forsome time. Capital inflows into South Asia have regainedsome momentum and proved more resilient in January 2014 asopposed to May 2013. This report presents recent economicdevelopments; outlook and policy; focus: from external todomestic risk; South Asia country briefs for Afghanistan,Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, andSri Lanka; and South Asia at a glance.