The World Bank says Pakistan will register a 4.5 % GDP growth this year as economic activity picks up in the second largest South Asian economy.
Pakistan’s economy – helped by an upbeat macro-economic outlook, low oil prices, growing activity and remittances inflows – is forecast to accelerate to 4.8 % next year and rise to 5.1 % in 2018.
Growth in South Asia is forecast to accelerate to 7.1% in 2016, despite weaker-than-expected growth in advanced economies, which has dampened export growth in the region, the Bank says.
“Activity has remained resilient as domestic demand, the main driver of growth, remained robust. India, the region’s largest economy, showed strengthening activity, as did Pakistan, Bangladesh and Bhutan.”
Most South Asian economies have benefitted from the decline in oil prices, low inflation, and steady remittance flows.
The World Bank has scaled down its 2016 global growth forecast to 2.4% from the 2.9% pace projected in January, due to a range of factors including slowdown in advanced economies, low commodity prices, weak global trade, and diminishing capital flows.
In its latest update on Global Economic Prospect, the Bank says commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities, and this accounts for 40% of the downward revision. Growth in these economies is projected to advance at a meager 0.4% pace this year, a downward revision of 1.2 percentage points from the January outlook.
“This sluggish growth underscores why it’s critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty,” said World Bank Group President Jim Yong Kim, “Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices.”
The trends show that commodity-importing emerging markets and developing economies have been more resilient than exporters, although the benefits of lower prices for energy and other commodities have been slow to materialize. These economies are forecast to expand at a 5.8% rate in 2016, down modestly from the 5.9% pace estimated for 2015, as low energy prices and the modest recovery in advanced economies support economic activity.
Among major emerging market economies, China is forecast to grow at 6.7% in 2016 after 6.9%last year. India’s robust economic expansion is expected to hold steady at 7.6%, while Brazil and Russia are projected to remain in deeper recessions than forecast in January.
