The Asian Development Bank (ADB) has said in its outlook report that Pakistan’s economic growth, despite having reached around six percent in the previous fiscal year (FY) 2022, could slow down to 3.5 percent.
The ADB has stated that double digit inflation, climate issues along with policy efforts would be the factors affecting the economic growth.
ADB has revised the growth estimates for Pakistan from 4.5 percent to 3.5 percent in its latest outlook update in the context of floods, policy tightening and critical efforts for tackling sizeable fiscal and external imbalances.
The outlook update has stated that higher private consumption along with agricultural, services and large-scale manufacturing had helped improve growth in FY 2022.
The recent floods caused widespread damage and “profound risk to the country’s economic outlook”, ADB Country Director for Pakistan Yong Ye has said. He further added that significant international financial support would be catalyzed by flood-related reconstruction and reforms.
The ADB country director also stated that ADB was preparing a package of relief, rehabilitation, and reconstruction to support people, livelihoods, and infrastructure immediately and in the long-term.
The outlook update has said that during the fiscal year 2022, there was an increase in private consumption by 10 percent whereas agricultural output of the country expanded by 4.4 percent.
However, it has also mentioned that the forecasted inflation could go up to 18 percent due to inflationary pressures. This elevated inflation combined with globally increased food and energy prices, would remain as downside risks to the outlook.
