ISLAMABAD: The United Nation Economic and Social Survey of Asia and Pacific (ESCAP) projected the economy of Pakistan to grow by 4 percent during the year 2012.
According to a report launched by ESCAP on Thursday, the Gross Domestic Product (GDP) in Pakistan is projected to grow by 4 per cent in 2012 which is an improvement from 2.4 per cent growth in 2011.
Speaking at a report launching ceremony held here, Dr Ashfaq Hassan, an economist said that the economic growth of the country has increased mainly due to the enhanced output of agriculture sector.
He said the agriculture sector was improving due to the post-flood recovery in cotton, rice, wheat, sugar cane and other minor crops.
Dr Ashfaq said cut in monitory policy by 200 basis points by the State Bank of Pakistan also supported the economic growth of the country.
"Pakistan, after several increases in the policy rate, lowered the policy rate by 50 basis points in July 2011 and further by 150 basis points in October, 2011 despite inflation remains elevated.
The moves were aimed to stimulate private investment and economic growth", Dr Ashfaq said while elaborating the report.
The GDP growth in the country slowed considerably to 2.4 per cent in fiscal year 2011 from 3.8 per cent in the previous year, mainly due to prevailing security concerns, the exogenous shock from elevated oil prices and unprecedented floods in a large part of the country and shortage of electricity and natural gas have also hampered the economic growth, he added.
The economic survey of Asia reported that to reduce the budget deficit in Pakistan, the government was making efforts to improve tax compliance and broaden the tax base.
The report said that current account of balance of payments in the country registered surplus in 2011.
"In Pakistan, the external sector registered a surplus on the current account, making it a bright spot of the economy in 2011", the report added.
According to the report the exports increased by 29.3 per cent and workers' remittances reached an historic level of more than $11.2 billion in 2011.
Rising prices of value-added textiles helped propel the rapid growth of exports. Foreign exchange reserves also increased considerably.
The report further said that in order to address energy shortages, the government should take various measures including setting up viable new power projects, minimizing transmission and distribution losses including theft of electricity, increasing exploration of natural gas, crude oil and coal, tapping of regional markets and setting up infrastructure for energy imports.
The report said that widespread poverty continues to be major challenge in South Asia. "To fight against poverty, countries need to continue to implement economic reforms to improve productivity, strengthen public institutions, improve economic governance and build social safety nets to protect the more vulnerable segments of the population", the Economic Survey of Asia added.
Clovis Freire, representative said on the occasion that Asia and the Pacific faces another year of slowing growth as demand for its exports falls in developed nations and capital costs rise, but the region will remain the anchor of global economic stability.
He said that the growth rate of the region's developing economies is projected to slow down to 6.6 per cent in 2012 from 7.0 per cent last year compared to a strong 8.9 per cent in 2010.