MANILA: Asian Development Bank’s Asian Development Outlook 2019 (ADO) reiterates that the nation’s economy is expected to develop more slowly than last year, with GDP development estimated at 2.8% in 2020 financial year
The report released on Wednesday states that Pakistan’s economic growth had decelerated during the fiscal year 2019 and this reflected “lower investment amid policy uncertainty and persistent macroeconomic imbalances”.
“Sizeable currency depreciation accelerated inflation but helped substantially narrow the current account deficit,” it stated.
The outlook noted that Pakistani authorities are executing a “comprehensive program of fiscal consolidation and monetary tightening to stabilize the economy and address structural weaknesses”.
As per the released report of ADO, provisional estimates have found that GDP growth declined from 5.5pc in FY2018 to 3.3pc in 2019.
It states that on the supply side, all sectors had “contributed substantially less” contribution to GDP growth than a year prior. Whereas, on the demand side, private consumption has accounted for 82pc of the GDP “despite higher inflation and borrowing costs”.
Addressing the economic future of the country, the ADO said to restore macroeconomic stability, the government plans to catalyse significant international financial support and promote sustainable and balanced growth under a 3-year economic stabilisation and reform programme with the International Monetary Fund (IMF).
Fiscal consolidation under the programme aims to reduce the large public debt while expanding social spending, establish a flexible exchange rate regime to restore competitiveness, and rebuild official reserves, the report added.