Pakistan’s Economy In Doldrums
Pakistan’s economy is in shambles. Pakistan is a net importer of oil and natural gas, with both comprising almost 20pc of total imports, the country will continue experiencing strong inflationary pressure for the rest of the current fiscal year from the jump in global fuel prices related to the Russian invasion of Ukraine. The much talked of China Pakistan Economic Corridor has phenomenally increased the interest burden on Pakistan turning it into a virtual economic slave of China.
The Asian Development Bank (ADB) on Wednesday forecast Pakistan’s economic growth rate to slow down to 4 per cent this year from 5.6 pc in the Fiscal Year 2021.
The decline in the growth rate is owing to tighter fiscal and monetary policies and the Russia-Ukraine war. According to the Asian Development Outlook (ADO) 2022, ADB’s annual flagship publication, the Manila-based lending agency said Pakistan’s revenue collection was still lower when compared with peers and needed a strong reform effort to achieve its tax-to-GDP potential of 22-25pc, reported Dawn.
Moreover, the ADB also projected growth in South Asia to slow to 7pc in 2022 (from 8.3pc in 2021), before picking up to 7.4pc in 2023.
“Pakistan’s growth is forecast moderating to 4pc in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5 in 2023”, the ADB said.
The ADB expected inflation to pick up in FY22, averaging 11pc, reflecting higher international energy prices, significant currency depreciation, and elevated global food prices from supply disruptions reported the newspaper.
