Pakistan’s economy recovering: ADB report

ISLAMABAD: The Asian Development Bank (ADB) said Pakistan’s economy is recovering, particularly in manufacturing and construction, supported by government’s emergency relief.

In a brief comment on seven pages, Asian Development Outlook Supplement released by ADB Thursday discussed the largest economies of its member states but it did not include Pakistan on account of sharing many details in its seven-page report.

Despite the continuous spread of COVID-19, most economies have continued to relax containment measures, having deemed strict lockdowns to be economically unsustainable. Variation in the intensity of containment reflects the state of outbreaks in different economies. Containment remains relatively stringent in Central, South, and Southeast Asia, where outbreaks have continued in some economies and reemerged in others. Containment is less stringent in East Asia and the Pacific where outbreaks are under control or absent.

With improved prospects for India, South Asia’s growth forecast for 2020 is revised up to from 6.8% contraction to 6.1%. The sub-regional growth projection for 2021 is revised up slightly from 7.1% to 7.2%. Having contracted by 23.9% in Q1 of fiscal year 2020 (FY2020, ending March 31,2021), the Indian economy began to normalise after containment measures started in ease in June, with economic contraction in Q2 FY2020 narrowing to 7.5%, better than expected.

Developing Asia is now forecast to contract by 0.4% in 2020, less than the 0.7% contraction envisaged in the Asian Development Outlook 2020 update in September. Growth will rebound to 6.8% in 2021, but prospects diverge within the region.

Growth forecasts for Central Asia and the Pacific are unchanged from September. Central Asia is still projected to contract by 2.1% this year, and the Pacific economies by 6.1% as global tourism continues to languish. Depressed demand and low oil prices will keep regional inflation in check at 2.8% in 2020 and 1.9% in 2021.