ISLAMABAD: The Asian Development Bank (ADB) has projected Pakistan’s economy would regain some pace and grow at 2% in the upcoming fiscal year 2020-21, after contracting by 0.4% in the outgoing fiscal year 2019-20 in the wake of Covid-19 pandemic.
The ADB said in a regular supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020 that inflation rate in Pakistan would remain at 11% as against the earlier projection of 11.5% in current fiscal year ending on June 30.
“Pakistan’s economy was on the path to recovery before Covid-19, and once the Covid-19 impact subsides, Pakistan will resume its efforts to address macroeconomic imbalances and initiate structural reform, likely holding economic growth to a projected 2.0% in FY2021,” the bank said.
“Inflation rate in Pakistan would remain at 11% as against the earlier projection of 11.5% in current fiscal year,” it said, adding that in next fiscal year, the inflation rate would remain 8% against the earlier projection of 8.3%.
The supplement said that South Asia’s economy, which had been hit hard by Covid-19, was forecast to contract by 3.0% in 2020, compared to 4.1% growth predicted in April. It added India’s was forecast to contract by 4.0% in fiscal year 2020, ending on March 31, 2021, before growing 5.0% in 2021.
The ADB said that the developing Asia overall would barely grow in 2020 as containment measures to address the coronavirus pandemic hampered economic activity and weakened external demand. It forecast growth of 0.1% for the region in 2020 – down from the 2.2% forecast in April.
The growth of 0.1% would be the slowest for the region since 1961. Excluding the newly-industrialised economies of Hong Kong, China; Republic of Korea; Singapore; and Taipei, China, developing Asia is forecast to grow 6.6% in 2021,” the supplement said.
Pakistan's economy contracts for first time in 68 years
“Economies in Asia and the Pacific will continue to feel the blow of the Covid-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” ADB Chief Economist Yasuyuki Sawada said in a statement.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of Covid-19 and ensure that no further waves of outbreaks occur.”