KARACHI: The Asian Development Bank, in its latest report, has projected positive results, saying Pakistan’s economy will continue to pick up in the ongoing fiscal year of 2015-16.
The ADB, in Asian Development Outlook (ADO) 2016 report, forecast growth of 4.5 percent for FY16 and 4.8 percent for FY17. In FY15, the growth came in at 4.2 percent.
While the outlook is for moderate gains in growth, the report said the continued public sector enterprise losses, insufficient energy and power evacuation capacity, and security concerns will continue to test the country’s economy.
”Pakistan needs to stay the course of macroeconomic and structural reforms, in particular in revenue collection, the energy sector, and in revitalising public sector enterprises that have been causing a fiscal drain,” Werner Liepach, ADB’s Country Director for Pakistan said in a statement.
“These reforms are critical for fiscal and economic sustainability and to promote investment and economic growth.”
The report said large scale manufacturing grew 3.9 percent in the first half of FY16 from a rise of 2.7 percent in the same period the year earlier, boosted by low raw material prices, expanded construction, and low interest rates.
However, textile production grew only one percent over the same period due to weaker demand in export markets and increased competition, with falling global commodity prices and heavy rains damaging cotton output. Pakistan’s vital agriculture sector is expected to experience slower growth in FY16.
The report said the key challenges impeding stronger economic growth include inadequate infrastructure and transport connectivity, weak governance and institutions, and limited access to finance, “which hinders investment in key infrastructure.”
