Pakistan’s economy is projected to grow by 2% in the fiscal year 2021, according to the Asian Development Bank.
This is down from the projection of 3.2% growth, which the ADB had forecast earlier in April this year
The bank said that once the COVID-19 impact subsides, Pakistan will resume its efforts to address macroeconomic imbalances and initiate structural reform, likely holding economic growth to a projected 2%.
ADB in its latest report “Asian Development Outlook Supplement 2020” stated that Pakistan’s economy was on the path to recovery before COVID-19. It is projected to contract by 0.4% in fiscal year 2020 (ending 30 June 2020) as the outbreak further restricts economic activity.
In April 2020, the Bank had projected Pakistan’s economy to grow at 2.6 percent in the current fiscal year.
The Bank stated that inflation projections for Bhutan in 2020 and for Pakistan and Sri Lanka in 2020 and 2021 are revised down in line with sharply contracting demand.
ADB has revised downward the inflation rate projection for Pakistan from 11.5 percent to 11 percent for the current fiscal year and from 8.3 percent to 8 percent for the next fiscal year.
“Economies in Asia and the Pacific will continue to feel the impact of the COVID-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” said ADB Chief Economist Yasuyuki Sawada.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur.”
Developing Asia is now projected to grow by only 0.1 percent in 2020, which would be the lowest regional growth outcome since 1961. Contraction is expected in all sub-regions except in East Asia, the report added.
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