ADB maintains FY17 growth forecast at 5.2pc

KARACHI: The Asian Development Bank on Tuesday maintained its growth forecast for the Pakistan’s economy at 5.2 percent for the current fiscal year of 2016/17, spotting services sector as a key driver. 

“In Pakistan, GDP growth is expected to be on track in FY2017 (ending 30 June 2017), driven mainly by the service sector,” said the Manila-base lender in a supplement to its Asian Development Outlook (ADO) 2016 Update report.

In September, ADB upgraded its growth forecast for Pakistan to 5.2 percent on improved energy supply and security and a rising investment in China-Pakistan Economic Corridor projects.

Services sector posted a growth of 5.71 percent in 2015/16 as compared to 4.31 percent in the preceding fiscal year. 

The World Bank, in its report, also identified services and large-scale manufacturing as, “the key supply-side drivers of growth.” 

The State Bank of Pakistan, its annual economic review, said the country’s GDP growth rate is expected to increase between 5 to 6 percent by the end of current financial year as against the government’s target of 5.7 percent. The growth for the last fiscal year was recorded at 4.7 percent – highest in the last eight years. 

ADB’s supplement also kept the inflation forecast for 2016/17 unchanged. It had edged up the forecasts for inflation to 4.7 percent on an expected oil price rises and stronger domestic demand in an increasingly supply constrained economy in the update of its flagship annual economic publication ADO 2016

It said developing Asia’s growth outlook continues to be stable despite a slight downgrade to the 2016 forecast. The region is now expected to grow this year by 5.6 percent, or 0.1 percentage points off the rate envisaged in ADO 2016 Update as slower growth is now expected in India, one of the region’s largest economies. Growth is expected to edge back up to 5.7 percent in 2017, the pace envisaged in the update. By subregion, growth forecasts are revised slightly down for South Asia in 2016 and the Pacific in 2017 but otherwise unchanged, it added.