The Asian Development Bank (ADB) forecasts a modest recovery in Pakistan’s gross domestic product (GDP) growth to 1.9 percent in fiscal year 2024 (1 July 2023 to 30 June 2024) from 0.3 percent in FY2023, with price pressures remaining high.
The Asian Development Bank (ADB) stated in a report released on Wednesday that Pakistan’s adherence to an economic adjustment programme through April 2024 will be essential to reestablishing macroeconomic stability and the gradual recovery of the country’s growth.
However, the Asian Development Outlook (ADO) for September 2023 indicates that there are still significant risks to the outlook, such as global price shocks and slower global growth.
“Pakistan’s economic prospects are closely tied to the steadfast and consistent implementation of policy reforms to stabilise the economy and rebuild fiscal and external buffers,” said Yong Ye, the ADB’s Country Director for Pakistan. “The key to reviving economic growth and protecting social and development spending is greater fiscal restraint, a market-determined exchange rate, and quicker progress on reforms in the energy sector and state-owned enterprises.”
Pakistan’s economy experienced significant floods, global price shocks, and political unrest in FY2023, all of which slowed growth and raised inflation. The ADO forecasts that the implementation of the economic adjustment programme and a smooth general election in FY2024 will boost confidence, while the likely encouragement of investment will come from the easing of import restrictions.
A recovery in agriculture is anticipated to be supported by favourable weather conditions as well as the government’s relief package of free seeds, subsidised credit, and fertilisers. In turn, this will benefit the sector, which will gain from the increased accessibility of essential imports.
