Global economic outlook report: Pakistan was 41st in 2018, will be 50th in 2034

LAHORE: According to a recent report issued by the Centre for Economics and Business Research (CEBR), the UK and China will be the first economic power while the US second, India third and Pakistan 50th in 2034.

In 2019, among 193 countries, Pakistan’s economic position is 44th while the US’s first, China’s second, Japan’s third, Germany’s fourth and India’s fifth. In the last year report, the think tank had declared Pakistan 37th in 2028 and 27th in 2033. In 2019, Pakistan’s GDP growth was 3.3 per cent whereas in 2018, it was 5.5 per cent. As many as 193 countries have been categorised in the 234-page report titled World Economic League Table. According to the report, in 2003, Pakistan was on 44th position; in 2008, on 50th; in 2013 on 48th; and in 2018, on 41st. In 2019, it was on 44th position and the position will be the same in 2020. In 2024 and 2029, its position will be 46th and in 2034, 50th.

The report said with 5,872 GDP per capita ratio, Pakistan is a country with mediocre income. The unemployment rate is 6.1 per cent. Between 2020 and 2025, its expected GDP growth is 4.2 per cent which can be five per cent annually.

In the last year’s report, the think tank said security concerns and political instability retarded the country’sdevelopment and it could not develop like neighbouring China and India. Pakistan is one of the biggest textile exporters. Agriculture is the backbone of the country, which is one fourth of the GDP for providing employment to 42 per cent people. Pakistan faced imbalance in terms of payments in 2018. Its foreign exchange reserves became less than $8 billion. The current account deficit rose up to 6 per cent of the GDP. It is because of this reason that the country had to go to the IMF for 12th time since 1980. Pakistan took $3 billion loan from Saudi Arabia and delayed $3 billion payment. China also promised to give loan to Pakistan. These developments ended the financial crisis for the time being, but economic reforms will be needed to avoid such a situation in the future.

After the economic strictness shown by the US Federal Reserves, Pakistani rupee devalued 30 per cent against the US dollar. The State Bank of Pakistan raised the interest rate to stabilise the currency. It affected economic progress, particularly manufacturing department. To meet the economic deficit, the Imran government took several measures including raise in income tax, tax collection from high-earners and reduction in expenditure on national projects. The government also increased taxes on 5,000 items to control current account deficit.