The economic recovery in South Asia continues, despite the ferocious resurgence of COVID-19 earlier this year. This recovery has not undone all the harm caused by the crisis, and targeted relief efforts are still needed. However, it is also time to shift gears and create the conditions for sustained growth going forward. New growth strategies should be informed by lessons learned from the crisis while using opportunities in the new normal. A key element of the new economic reality is the breakthrough of the new services sectors, which got a boost during the crisis. Services-led development has now become a possibility. That is good news for South Asia, which has a comparative advantage in services and has struggled to compete in manufacturing. To exploit this opportunity, a rethinking of institutions and regulations is needed.