In fiscal year 2023 (ending June 30, 2023) in the wake of last year’s devastating floods, ballooning inflation, current account deficit and ongoing foreign exchange crisis, the Asian Development Bank (ADB) said in a statement. Pakistan’s economic growth is expected to decrease significantly. Tuesday’s report.
According to the Asian Development Outlook (ADO) April 2023, ADB’s flagship economic report, Pakistan’s gross domestic product (GDP) growth is expected to be 0.6 percent in fiscal 2023, down from 6 percent last fiscal year. Because the struggle to restore the economy continues.
Growth is forecast to pick up to 2 percent in FY2024, taking into account the restoration of economic stability, implementation of reforms, post-flood recovery, and improvement in external conditions.
“Pakistan’s economy continues to face severe challenges while last year’s devastating floods have exacerbated the economic and financial challenges,” said ADB Country Director for Pakistan Yong Yee.
“Nevertheless, with a history of resilience in the face of adversity and relying on a rapid return to stability coupled with strong macroeconomic and structural reforms, Pakistan can bounce back. ADB will continue to support Pakistan’s economic recovery and development Committed to continuing to support projects.
ADO April 2023 notes that climate change is a serious challenge to Pakistan’s economic, social and environmental development.
According to the Global Climate Risk Index, the country has been among the 10 most vulnerable countries in the world over the past two decades.
Climate-induced extreme weather has caused thousands of deaths and huge losses in agriculture, infrastructure and the economy.
In fiscal 2023, industrial growth is forecast to continue to decline, reflecting fiscal and monetary tightening, a significant depreciation of the local currency, and higher domestic oil and electricity prices. The fiscal deficit is expected to narrow marginally to 6.9 percent of GDP in fiscal 2023.
If the International Monetary Fund’s (IMF) program remains on track, the deficit will likely continue to shrink over the medium term as further revenue-stimulating measures—such as harmonizing the general sales tax—gain momentum.
Average inflation is expected to more than double from 12.2 percent in FY2022 to 27.5 percent this fiscal. Core consumer inflation hit 25.4 percent in the first seven months of the fiscal year due to high domestic energy prices, a weak currency, flood-related supply disruptions and import curbs due to the balance of payments crisis.
As a net importer of oil and gas, Pakistan will continue to face strong inflationary pressures for the remainder of FY2023.
“ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while continuing its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members – 49 from the region, ” said the bank. a statement.
