ISLAMABAD: The Asian Development Bank (ADB) said on Wednesday that Pakistan’s economic growth improved to 2.4% in the last fiscal year and is projected to rise to 2.8% in the current financial year.
However, the ADB emphasized that any long-term sustainable growth depends on the continued implementation of robust economic reforms.
In its Asian Development Outlook September 2024, the ADB attributed this financial recovery to increased domestic consumption, driven by higher agricultural income and remittances from overseas Pakistanis.
The report stressed the importance of maintaining macroeconomic stability and ongoing growth recovery through adherence to an economic reform plan, while also noting potential downside risks.
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“Pakistan’s economic prospects are closely tied to the steadfast implementation of policy reforms aimed at stabilizing the economy and rebuilding fiscal and external buffers.
ADB Calls for Consolidated Public Finances
It is crucial for Pakistan to consolidate public finances, expand social spending and protections, mitigate fiscal risks from state-owned enterprises, and enhance the business environment to foster private sector-led growth,” stated ADB Country Director for Pakistan, Yong Ye.
Regarding private investment, the ADB indicated that the successful execution of the economic adjustment program in the current fiscal year is expected to encourage private investment, which requires more favorable macroeconomic conditions, including easier access to foreign exchange. This, in turn, would benefit both manufacturing and services sectors.
Furthermore, the report highlighted the necessity of a well-regulated monetary policy to keep inflation around 15%.
