Pakistan’s economy to accelerate in FY17: World Bank

Pakistan’s economy to accelerate in FY17: World Bank

Pakistan’s Economy News

ISLAMABAD: World Bank (WB) has said that Pakistan’s economy
is expected to accelerate in the current fiscal, however, it would
depend on the structural reforms and investments in different
sectors, Business92 reported (Pakistan Business News).

Moreover, “Pakistan needs to focus on structural reforms, implementation
of China Pakistan Economic Corridor (CPEC) and investment in
health, education for a stronger human capital, Enrique Blanco
Armas Lead Country Economists Macroeconomic and Fiscal
Management of WB also told reporters here.

“Falling exports and stagnant investment rates remain challenges
|for the Pakistan’s economy,” he also said and added that after achieving
macroeconomic stability, the government’s structural reform programme
was progressing but there was much more to do.

The World Bank official further said that although Pakistan has achieved
remarkable success in reducing monetary poverty, progress on health,
education and nutrition was slow.

Furthermore, Armas was also of the view that Pakistan investment rate was well below the
South Asian average.
He stressed the need for improving Pakistan’s trade competitiveness,
trade facilitation ,logistics and infrastructure, in order to boost its exports.

He further said that growth was expected to be driven by public and private consumption.

Moderate increase in investment

He also observed that a moderate increase in investment was also expected,
from 14 percent of GDP in FY 16 to 14.6 percent in FY 18.

“On supply side,the services sector was expected to continue to drive growth,
the current account deficit was expected to widen but financial flows will
continue to support reserve build up”, he also remarked.

The World Bank official also said that in fiscal year (FY) 2016 reached 4.7 percent – the
highest rate in eight years and a significant increase from the previous year’s 4 percent.

He also noted that South Asia continues to lead global growth, expanding by 6.8 percent
in FY16.

He further projected that the pace of Pakistan’s economic growth would accelerate
to 5.4 percent in FY18.

 

CPEC Project

He also said that a moderate increase in investment (related to CPEC projects) is
expected to contribute to an acceleration of growth, which would continue to
be driven by public and private consumption.

Like others in South Asia, Pakistan’s growth was driven by domestic consumption
that continues to compensate for weak global demand.

Released twice a year, the Pakistan Development Update includes recent
developments across the economy, the near-term outlook as well as special
sections with a more detailed discussion of key development challenges for
Pakistan, a World Bank statement issued here said.

Furthermore, he also said that Pakistan has made significant progress in reducing poverty over
the last decade. Based on the revised poverty line adopted in early 2016, the
percentage of people living below the poverty line decreased from 64.3 percent
in FY02 to 29.5 percent in FY14.

He also said that the pace of Pakistan’s economic growth would accelerate to 5.4 percent in FY18.

A moderate increase in investment (related to CPEC projects) was expected to
contribute to an acceleration of growth, which would continue to be driven by
public and private consumption.

He further said that in the long term, growth will be driven by increased investment in
both physical and human capital, with increased focus on better nutrition, health
and education outcomes.

World Bank highlighted Pakistan’s success

The World Bank highlighted Pakistan’s success in reducing poverty over the
last decade and a half – but contrasted this with the lack of progress in health,
education and nutrition outcomes since 2010.

“Pakistan has made significant progress in reducing poverty over the last
decade. Based on the revised poverty line adopted in early 2016, the percentage
of people living below the poverty line decreased from 64.3 percent in
FY02 to 29.5 percent in FY14.

This reduction in poverty is corroborated when analyzing other data,
such as asset ownership”, says Muhammad Waheed, Senior Economist
and lead author of the report. \

“But stunting rates have been unchanged for decades and health and
education outcomes have shown little improvement since 2010. By
reinvesting its economic gains in health and education systems, Pakistan
can make growth matter for all its citizens.”

Moreover, the report projected that the pace of Pakistan’s economic growth will
accelerate to 5.4 percent in FY18.

A moderate increase in investment (related to CPEC projects) is expected
to contribute to an acceleration of growth, which will continue to be driven
by public and private consumption.

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