Pakistan’s economy: ADB lists factors that continue to pose challenges

ISLAMABAD: The devastating floods in 2022, impact of the Covid-19 pandemic, security issues, structural risks, and adverse external shocks continue to pose major economic challenges to Pakistan, said the Asian Development Bank (ADB).

The bank in its report, “Factsheet on Pakistan,” stated that uncertainties and institutional factors continue to weigh on project implementation. These included land acquisition procedures, procurement delays caused by restrictions, and price fluctuations affecting the importation of construction materials.

However, tripartite portfolio review meetings among ADB, the government, and executing agencies help resolve project implementation issues.

Recovery needs estimated at $16.3bn: Floods hit 33m people, caused $30bn economic losses: ADB

Continued efforts towards fiscal consolidation and policy reforms will be key to improvements in macroeconomic recovery and stability, especially in broadening the tax base and improving the business environment in the country.

The report noted that reforms are required to promote high value-added exports, expand social spending, reinforce the energy sector’s financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.

The ADB’s country partnership strategy, 2021–2025, for Pakistan focuses on three priorities — improving economic management, building resilience, and boosting competitiveness and private sector development.

To date, the ADB has committed 740 public sector loans, grants, and technical assistance totaling $ 39.7 billion to Pakistan.

Cumulative loan and grant disbursements to Pakistan amount to $ 30.76 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.

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The ADB’s ongoing sovereign portfolio in Pakistan includes 53 loans and three grants worth $ 9.59 billion.

In 2022, the ADB’s loan and grant disbursements to Pakistan amounted to $ 2.49 billion. This included $ 1.8 billion in programme lending, $ 680 million from project lending, and $ 4.6 million from grants.

The ADB provided $ 1.5 billion to help Pakistan boost social protection, promote food security, and support employment for people.

Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31st December 2022 was $ 242.48 million representing 1.9 percent of the ADB’s total private sector portfolio.

Copyright Business Recorder, 2023