The Asian Development Bank has reviewed the rate of economic progress in various countries, including Pakistan and discussed the issues facing the nations. In its report ‘Asian Development Outlook 2017,’ the bank maintains projections for annual growth and inflation in Pakistan Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka. However, the report says that current account deficit is not only a problem for Pakistan but also for many other countries. The bank expects 5.5 percent growth in gross domestic products in advanced and developing economies due to continuous revival in world trade volume and overall improvement in the security and business environment. It also hopes that investments in infrastructure projects under the China-Pakistan Economic Corridor will give impetus to industrial and services sectors.The government is trying to improve energy supply and address fiscal and external sector issues and handle the growing current account deficit. The foreign exchange reserves are falling, debt obligations are growing and fiscal vulnerabilities are increasing which could force the government to seek financial assistance from international donor agencies. The government has apparently lost its momentum to prepare financial and economic policies which could resist growth prospects.
The country is facing burgeoning trade deficit due to low export volume while its foreign exchange reserves are also shrinking due to decrease in inflows of remittance sent by Pakistani expatriates from abroad. Economists fear that the country may also face inflation in coming months. They also expect increase in global oil prices, but easing of global food prices.The bank report projects inflation at 4.8 percent due to active vigilance by the State Bank. However, at least 18 percent increase in tax collection and non-tax revenues will generate and push up the revenues to 17.2 percent of the gross domestic product.
The bank forecasts development expenditures at 6.3 percent of the GDP as allocations of public sector development programmes have been increased by half in financial year 2017. In the next year budget, the federal government has already assumed that it will be able to get two-thirds of deficit financing from domestic sources. It is hoped the government will concentrate on increasing exports by reviving and stimulating the industrial sector, improving the energy supply and giving tax holidays to local and foreign investors. Unfortunately, political instability is taking its toll on the economy but the politicians are still engaged in tug of war with each other.
