EconomyPakistan

ADB’s New Report Predicts Pakistan’s GDP Growth at 1.9% for 2024

In a recent report, the Asian Development Bank (ADB) offered hopeful prospects for Pakistan's economy, predicting a drop in inflation and a boost in GDP growth. The ADB forecasts the country's inflation will reduce from 29% to 25% in the upcoming fiscal year. This anticipated positive change is largely attributed to the nation's upcoming general elections in 2023-24, expected to bolster economic confidence.

While the outlook seems favorable, Pakistan still faces the challenge of high inflation, driven by rising energy costs and a declining rupee value. Despite these pressures, the country's GDP is set to grow, with ADB expecting it to reach 1.9% in 2024, a significant improvement from the mere 0.3% recorded in the previous fiscal year.

For the country's economic health, ADB stresses the importance of the Economic Adjustment Program, set to be rolled out by April 2024. The program, which emphasizes fiscal discipline and a market-based exchange rate, aims to ensure economic stability and foster recovery. ADB believes that the easing of import controls under this program will also significantly push investments in Pakistan.

ADB's Country Director, Yong Ye, emphasized that for Pakistan to flourish, it must stick to consistent policy reforms. "Greater fiscal discipline and quicker reforms in the energy sector are crucial for reviving economic growth," he stated. Ye further highlighted the role of state-owned enterprises in aiding this revival and the importance of safeguarding social and developmental expenditures.

The past fiscal year posed several challenges for Pakistan, with setbacks such as severe floods, global price fluctuations, and political turmoil, which hindered economic growth and drove inflation up. However, with the proper implementation of the economic adjustment programme and the smooth execution of the 2024 general elections, ADB believes that confidence will be restored.

Several government initiatives are also projected to aid economic recovery. Measures such as free seed distribution, offering of subsidized credit, and provision of fertilizers are expected to revive the agricultural sector. As this sector grows, it's anticipated to positively influence the industrial sector, which will, in turn, benefit from easier access to necessary imports.

Concluding their report, the Asian Development Bank reaffirmed its dedication to fostering prosperity, inclusiveness, resilience, and sustainability across Asia and the Pacific. With the right policies and actions, Pakistan looks set on the path to economic resurgence, and the ADB's support and guidance will undoubtedly play a crucial role in this journey.

 

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