ISLAMABAD: Pakistan’s GDP growth in fiscal year 2025 is projected at three percent, revised upwards from 2.8 percent, while inflation forecast is revised downward for fiscal year 2025 to 10 percent from 15 percent in 2024, says Asian Development Bank (ADB).
The bank in its latest report, “Asian Development Outlook” stated that for fiscal year 2024, growth is revised upwards to 2.5 percent, in line with the updated official estimate.
The inflation forecast for fiscal year 2025 for Pakistan is revised downwards to 10 percent from 15 percent in ADO September 2024 due to faster-than-expected easing of inflationary pressures, the bank added.
ADB maintains GDP growth rate at 2.8pc
Consumer Price Index (CPI) inflation declined to single digits in August, reflecting high base effects, the impact of contained demand-side pressures, improved supplies of major food items, more favourable global commodity prices, and a delay in upward adjustments in administered energy prices.
Greater macroeconomic stability following the approval of the new International Monetary Fund (IMF) programme under the Extended Fund Facility in September will support recovery. Industrial output growth is projected to accelerate with the suspension of import management measures, higher investor confidence, and easier access to foreign exchange.
The report further noted that a more accommodative monetary policy because of faster-than-expected easing of inflationary pressures should further support economic activity through rebounding private investment. However, growth in agriculture is expected to weaken due to the heavy monsoon downpours during July–September 2024 and flood-like conditions in parts of the country. Wheat and cotton, two of Pakistan’s five major crops, are projected to perform poorly in fiscal year 2025.
While growth forecasts for Pakistan and Sri Lanka have been upgraded due to their recovery from the macroeconomic challenges of 2022–2023, downward revisions for Bangladesh and Maldives have further weighed on the 2024 outlook. The latter two economies’ growth forecasts are also revised downward for 2025 due to the lingering effects of the political unrest of July-August 2024 in Bangladesh and fiscal consolidation measures in Maldives. Some weakening of growth is also expected for 2025 in Nepal relative to earlier forecasts.
Copyright Business Recorder, 2024
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