Looking at the growing number of cars and development of new superb housing projects indicate that standard of living in Pakistan is going upward.However, international figures show that the country’s economy is progressing but it has the weakest gross domestic products in all regional countries.According to a World Bank report, favorable oil prices will definitely accelerate economic growth in South Asia in coming years as the region is one of the greatest beneficiaries of cheap oil in the international market.
The country’s economy is expected to grow by 4.6 percent by 2016.However,India’s GDP will grow by 7.5 percent; Nepal’s by 5 percent, Bhutan by 6.7 percent and Sri Lanka by 6.9 percent. Even Afghanistan’s GDP growth is expected to settle at 5 percent by 2016. In contrast to the World Bank figures, the living standard of the people in Pakistan is much higher than those of the countries in the region. The problem is that Pakistan has largely undocumented economy and a vast majority of the well-to-do people do not pay taxes.
The twice-a-year South Asia Economic Focus report projects that the regional growth will steadily increase from 7 percent in 2015 to 7.6 percent by 2017 through strong consumption and increasing investment. The projection reflects India’s expected growth driven by business-oriented reforms and improved investor sentiment in the coming years.
The report says that Pakistan has contained inflation to a single digit and the country’s gradual recovery to around 4.6 percent growth by 2016 is also aided by fiscal consolidations. Further growth will depend on dealing with key growth constraints, including frequent power cuts, low tax revenues and an unfriendly business environment.
Decline in oil prices at the world level has been reflected in domestic prices of oil products in Pakistan as pass-through has exceeded 50 percent for most oil products, but it is nil in Bangladesh.
The country has always performed well than all the other countries in the region due to various factors. One of the major factors is that the Pakistani economy is resilient and always bounces back in hostile situations. Pakistan survived without any foreign aid from 1947 to 1951 until it started the economy of loans when government of the time signed agreements with the World Bank. The basic indicators in Pakistan are positive and economy needs to be fairly documented otherwise across the board taxes will add insult to injury.