close
Friday March 29, 2024

Pakistan’s growth outpaces ADB’s forecast in 2017/18

By Our Correspondent
July 20, 2018

KARACHI: Asian Development Bank (ADB) on Thursday said Pakistan’s growth during the last fiscal year of 2017/18 remained more than the bank’s forecast as agriculture sector cultivated the substance required to sprout the country’s economy’s size.

“Preliminary government estimate of GDP growth in fiscal year 2018, ended 30 June 2018, in Pakistan surpassed ADO 2018 forecasts,” the ADB said in a supplement to its Asian Development Outlook (ADO) 2018 report released last April.

The Manila-based lender, in the outlook, forecast growth in gross development product at 5.6 percent during the last fiscal year of 2018 on strong prospects for large-scale manufacturing and crop harvests for a second year in a row, buoyant domestic demand, recovery in exports, improved power supply, and favourable commodity prices. Government, however, said the country achieved the 13-year growth of 5.8 percent in FY2018. The ADB counted agriculture sector as one of the key propellers to growth during the last fiscal year.

“In Pakistan, agriculture recorded notable improvement over the previous fiscal year and surpassed the annual growth target of 3.5 percent on stronger growth in major crops and a modest increase in livestock,” the bank said.

ADB, however, previously warned of slowdown in growth momentum in years ahead. It expected GDP growth to adjust downward in FY2019 to 5.1 percent as balance-of-payment constraints seem to outweigh improvements to supply-side factors such as energy supply.

ADB said the outlook in South Asia continues to be for a robust economy, with growth on track to meet ADO 2018 forecasts of seven percent for 2018 and 7.2 percent for 2019.

“South Asia… continues to be the fastest growing subregion, led by India, whose economy is on track to meet fiscal year 2018 projected growth of 7.3 percent and further accelerating to 7.6 percent in 2019, as measures taken to strengthen the banking system and tax reform boost investment,” the bank said in a statement.

“In both Pakistan and Bangladesh, agriculture recorded notable improvement over the last year, surpassing expectations and driving growth.”

ADB sees growth across the region “solid” and “apace… despite rising tensions between the United States and its trading partners”. The bank, however, raised inflation forecast for the region for 2018 to five percent from 4.7 percent, but maintained it at 5.1 percent for 2019. ADB, however, projected lower inflation for developing Asia at 2.8 percent for 2018 and 2.7 percent for 2019.

“Domestic factors, including central bank intervention to avoid sharp currency depreciations, and the reintroduction of food and fuel subsidies to contain the effects of rising commodity prices in some economies, helped contain inflationary pressures,” it said in the statement.