The Asian Development Bank (ADB) has expressed optimism regarding Pakistan’s economic prospects, highlighting that the reform programme and smooth conduct of upcoming general elections are likely to restore investor confidence in the country’s economy.
The regional financial institution, in its report released on Wednesday, underscored the significance of Pakistan’s commitment to an economic adjustment programme until April 2024, which is crucial for reestablishing macroeconomic stability and facilitating the gradual resurgence of economic growth.
According to the Asian Development Outlook (ADO) for September 2023, Pakistan’s gross domestic product (GDP) growth is expected to experience a modest recovery, increasing from 0.3% in FY2023 to 1.9% in FY2024, although inflationary pressures are expected to persist.
However, significant downside risks to the outlook remain, including global price shocks and slower global growth.
The ADB also anticipates a decrease in Pakistan’s inflation trends to 25% in FY2024 from the elevated 29.2% experienced in FY2023 in the wake of base-year effects setting in, normalisation of food supply, and a moderation in inflation expectations.
“However, sharp increases in energy tariffs under the economic adjustment programme, and the continued weakening of the rupee will keep inflationary pressures elevated,” it added.