According to newspaper reports,the Asian Development Bank has project that the economy of Pakistan will grow by 5.2 percent during 2016-17 as the government will be able to further improve energy supply as well as the law and order in the country.The bank, in its ‘Asian Development Outlook 2016 Update’, also warns about the challenges the country is facing in governance, security and production sectors.The revival of the agriculture sector and improvement in the industrial productivity have come as the major areas of concern for the government this year. Exports are already on the downward trajectory and investment remained less than one billion during the previous fiscal year. What the government needs to do is to improve business and regulatory environment in the country to allow the market forces to work independently. The economies of India and Bangladesh are developing at fast rates, but Pakistan is going downward. The government must revise the overall look of the economy to keep up pace with the developing countries.
The bank also warns against short-term and long-term risks the country could face in its economy. The short-term risks include unexpected increase in oil prices or slowing of remittances sent by expatriate Pakistanis back home. The government is not ready to enter another IMF programme,but the government should continue to focus on strict monetary and fiscal discipline. The next parliamentary elections are only two years away and the government will have to concentrate on the structural reformsin official machinery to maintain sustainable and equitable growth in the country.As Pakistan has received last tranche from the international monetary fund under the three-year extended facility programme, the government has apparently consolidated the gains in the macroeconomic field. The government has also successfully contained inflation to single-digit during the last three years and foreign exchange reserves are at satisfactory level. However, the budget deficit are increasing and have reach over $22 billion as exports have constantly been declining for the last three years.
The way the government has enhanced its revenue is questioned by experts as witch-hunt of the business community will lead the economy to nowhere. The tax reforms agenda should base on rationales and not on repression. The bank report hopes that the China Pakistan Economic Corridor will have a major impact on the country’s growth during the current fiscal year as billionsof dollars are being spent on infrastructure projects, including on roads, railways, pipelines, and electricity. It is understandable that the prime minister and the finance minister have busy schedules, but their attention and concentration on the state of economy is also essential.
