The Asian Development Bank (ADB) has expressed optimism regarding the economic outlook of Pakistan, emphasizing that the ongoing reform program and the smooth conduct of the upcoming general elections have the potential to instill confidence in investors and revitalize the country’s economy.
In its latest report released on Wednesday, the regional financial institution emphasized the significance of Pakistan’s commitment to an economic adjustment program scheduled to continue until April 2024. This commitment is seen as crucial for re-establishing macroeconomic stability and facilitating a gradual resurgence of economic growth.
According to the Asian Development Outlook (ADO) for September 2023, Pakistan’s gross domestic product (GDP) growth is expected to undergo a modest recovery. It is projected to increase from 0.3% in FY2023 to 1.9% in FY2024, although persistent inflationary pressures are anticipated.
Nonetheless, the report also highlights the existence of significant downside risks to this outlook. These risks include the possibility of global price shocks and a slowdown in global economic growth.
The ADB further anticipates a decline in Pakistan’s inflation rates, projecting it to reach 25% in FY2024, down from the elevated 29.2% experienced in FY2023. This expected decline is attributed to base-year effects, the normalization of food supply, and a moderation in inflation expectations.
However, the report notes that “sharp increases in energy tariffs as part of the economic adjustment program, along with the continued depreciation of the rupee, may sustain inflationary pressures.
