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Pakistan’s economy is recovering: ADB

ABD

ISLAMABAD: The Asian Development Bank (ADB) has said that Pakistan’s economy was recovering but did not provide any growth projection.

This was according to a brief seven-page report “Asian Development Outlook (ADO) 2020 Supplement: Paths Diverge in Recovery from the Pandemic” released on Thursday. “Pakistan’s economy is recovering, particularly in the manufacturing and construction sectors, supported by the government emergency relief,”  said the report.

Despite the continuous spread of COVID-19, most economies have continued to relax containment measures and strict lockdowns have been deemed economically unsustainable, it said.

Developing Asia is now forecast to contract by 0.4% in 2020, less than the 0.7% contraction envisaged in the Asian Development Outlook 2020 update in September. Growth will rebound to 6.8% in 2021, but prospects diverge within the region.

Recovery in Southeast Asia would lag as coronavirus containment efforts in larger economies hamper economic activity. Subregional forecasts have been downgraded for 2020 from 3.8% contraction to 4.4%, and for 2021 from 5.5% growth to 5.2%.

With improved prospects for India, South Asia’s growth forecast for 2020 is revised up to from 6.8% contraction to 6.1%. The sub-regional growth projection for 2021 is revised up slightly from 7.1% to 7.2%.

Having contracted by 23.9% in Q1 of fiscal year 2020 (FY2020, ending March 31,2021), the Indian economy began to normalise after containment measures started in ease in June, with economic contraction in Q2 FY2020 narrowing to 7.5%, better than expected. The earlier South Asia forecast for 6.8% contraction is upgraded to 6.1% in line with an improved projection for India.

Growth forecasts for Central Asia and the Pacific are unchanged from September. Central Asia is still projected to contract by 2.1% this year, and the Pacific economies by 6.1% as global tourism continues to languish. Depressed demand and low oil prices will keep regional inflation in check at 2.8% in 2020 and 1.9% in 2021.