KARACHI: China’s investment of over $60 billion in Pakistan’s infrastructure and power projects under the China-Pakistan Economic Corridor (CPEC) is expected to increase Pakistan’s economic growth by around 3.5 percentage points, said Standard Chartered Bank (Pakistan) CEO Shahzad Dada on Thursday.
“CPEC projects are estimated to contribute around 3.5 percentage points to Pakistan’s GDP (gross domestic product) growth once they are fully delivered,” he emphasised while speaking at an event in Karachi.
Dada noted that most of the Chinese companies investing in Pakistan under CPEC were clients of the bank and Standard Chartered was itself involved in financing some of the projects as well.
Early harvest projects under CPEC are expected to be completed in the current calendar year. Later, short-term projects are anticipated to be completed by 2022, medium-term projects by 2025 and long-term projects by 2030 and beyond.
Pakistan achieved a 13-year high GDP growth of 5.8% in FY18. However, the growth is expected to slow down to around 4.4% in the current fiscal year and 4.1% in FY20, according to Fitch Solutions.
Dada highlighted that China and Pakistan signed a memorandum of understanding for investment of over $60 billion, of which infrastructure and power projects worth over $30 billion were under way. CPEC is part of China’s wider Belt and Road Initiative (BRI).
“We have discussed trade amounting to almost $2.5 trillion which is going to be routed through various corridors and Pakistan sits at the epicentre of all this activity,” he pointed out. “With the Belt and Road Initiative, there is expectation that trade is going to double, quadruple or rise even further.”
Published in The Express Tribune, March 22nd, 2019.